Edel exploit shows tokenized stocks can fail as DeFi collateral even without moves in the underlying share price
DeFi lending protocol Edel disclosed a $403,000 exploit that hinged on manipulating the ERC-4626 vault exchange rate between its wrapped tokenized Google stock wGOOGLx and the underlying GOOGLx, inflating collateral value by about 78x. The attacker then borrowed real assets including 384,215 USDC and wrapped positions in SPYx, QQQx, MSTRx, NVDAx, and TSLAx. Edel said depositors will not bear losses and that the team will absorb the bad debt, restore affected balances one-to-one, and rebuild its oracle architecture for a v2 release. The incident highlights how wrapper layers and oracle design can undermine tokenized stocks as collateral even when the underlying stock price itself is not the driver.