Solana-based DeFi protocols Orca and Loopscale are merging to form a new entity named Formation. The company aims to shift its focus toward financing sectors such as artificial intelligence, energy, robotics, and defense.
Loopscale, which launched publicly in 2025, operates as a lending protocol on the Solana blockchain. It distinguishes itself from standard DeFi platforms by offering fixed-rate borrowing and lending services based on an order-book model.
In March 2025, Loopscale integrated support for Orca and Raydium liquidity provider tokens. This move was designed to provide access to more than $1 billion in liquidity, allowing providers to borrow against their positions.
The transition into real-world asset financing introduces new challenges for the combined entity. These include increased regulatory exposure and credit risks associated with hardware startups, which differ from the rapid liquidation processes typical of crypto-collateralized markets.
