Solv Protocol is investigating an exploit that drained roughly $2.7 million from one of its structured yield vaults, adding to a growing list of security incidents across the decentralised finance sector this year.
In a Thursday update on X, the project confirmed that about 38.0474 SolvBTC was removed from one of its Bitcoin Reserve Offering vaults.
The platform said it would fully cover the losses, noting that fewer than 10 users were affected by the breach.
Solv Protocol operates an on-chain Bitcoin reserve designed to turn BTC into a productive asset.
Users can deposit Bitcoin in exchange for SolvBTC, a wrapped asset that allows the underlying holdings to be used across lending, borrowing, and staking strategies on other blockchains.
The protocol also offers structured yield products known as Bitcoin Reserve Offerings, or BRO, which package BTC exposure into vault-based investment strategies.
According to the project’s website, Solv holds about 24,226 BTC, valued at more than $1.7 billion, and describes itself as the largest on-chain Bitcoin reserve.
Data from DefiLlama shows more than $508 million currently locked in SolvBTC-related products.
While the protocol has not released a full technical breakdown of the breach, security researchers have pointed to a vulnerability in one of Solv’s smart contracts that allowed the attacker to mint excessive tokens.
An automated monitoring bot operated by security firm Decurity indicated that the exploiter triggered a double minting flaw in a BitcoinReserveOffering contract 22 times.
Through the repeated transactions, the attacker inflated 135 BRO into roughly 567 million BRO tokens and then swapped the position for around 38 SolvBTC.
Pseudonymous researcher Pyro characterised the incident as a reentrancy attack, a technique in which repeated contract calls exploit weaknesses in how balances are updated within smart contracts.
Variants of the attack have been responsible for multiple high-profile DeFi breaches over the past several years.
Solv said it is now working with several blockchain security firms, including Hypernative Labs, SlowMist, and CertiK, to investigate the incident and strengthen the affected contracts.
“All other vaults and user funds remain secure and unaffected. We’re actively investigating with top security partners and have taken steps to prevent any recurrences,” it added.
In an effort to recover the stolen assets, Solv has offered the exploiter a 10% white hat bounty if the funds are returned.
The protocol also published an Ethereum wallet address in its announcement to facilitate communication with the attacker, though no response had been recorded at the time of publication.
DeFi remains vulnurable
DeFi security remains a concern following a difficult 2025, during which more than $3.4 billion was stolen across the sector.
And while the opening months of 2026 have not seen the same scale of mega hacks, a series of smaller but focused breaches has kept security concerns firmly in view.
Across January and February, the crypto and DeFi sectors recorded about $112.5 million in losses across 31 incidents.
January accounted for most of the damage, with $86 million stolen across multiple projects.
Earlier this week, Curve Finance’s sDOLA LlamaLend market was exploited through a vulnerability tied to its price oracle configuration, allowing the attacker to earn roughly $240,000 through flash loan-driven liquidations.
In early February, cross-chain liquidity protocol CrossCurve lost roughly $3 million after attackers exploited a flaw that allowed spoofed cross-chain messages to bypass gateway validation and unlock assets from its PortalV2 contract.
Although the overall value of losses has declined compared with the large-scale breaches seen in early 2025, security analysts say a small number of high-impact incidents continue to shape the risk environment for decentralised finance platforms.
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