How tokenized stocks fail as collateral even when the stock price does not move
Edel, a DeFi lending protocol for tokenized stocks, disclosed a $403,000 exploit targeting its wrapper/oracle layer rather than the underlying stock price. The attacker used a flash loan to manipulate the exchange rate between wGOOGLx and GOOGLx, inflating wGOOGLx’s collateral value by about 78x and borrowing real assets against it, including USDC and wrapped positions in major stock tokens. Security firms gave different loss figures because they measured different things: gross loss, bad debt, or net profit. Edel said users will be made whole and the protocol will absorb the losses while redesigning its oracle system for v2. The incident shows that tokenized equities used as DeFi collateral introduce extra risk from wrappers, exchange rates, and price feeds, not just the asset itself.
