finance
$292 Million Kelp DAO Exploit Leads to $10 Billion Aave Outflows and 40% TVL Decline
More than $10 billion has left Aave following the $292 million exploit of Kelp DAO, which broke the cross-chain backing of rsETH. Aave's total value locked fell about 40%, with some funds moving to Maker-linked Spark and stablecoins. Bitcoin climbed to $78,100 amid separate developments, while another DeFi hack occurred days later.
Apr 22, 5:46 AM·1m read1 source
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More than $10 billion has left Aave since the $292 million Kelp DAO exploit, CoinDesk reported. The exploit broke the cross-chain backing of rsETH, draining about 116,500 rsETH from a LayerZero-powered bridge that spans more than 20 blockchains. Aave’s total value locked has fallen about 40% according to DeFiLlama data, as impaired collateral and forced deleveraging drove users to unwind positions and withdraw funds.
Funds leaving Aave are splitting across safer lending, simpler ETH exposure and off-chain yield, with stablecoins acting as a temporary refuge, CoinDesk reported. Capital has fragmented across alternatives, with real-world asset protocols such as Centrifuge and Spiko seeing inflows, while large liquid staking providers like Lido have held relatively steady.
A Polymarket contract suggests a 14% chance that Kelp DAO will spread the losses from the $292 million rsETH exploit across all holders, CoinDesk reported. The hack left some rsETH undercollateralized, with users favoring tighter risk controls over open-ended lending markets exposed to complex collateral.
A significant share of funds has moved into stablecoins such as USDC, as users step out of risk rather than immediately redeploying capital.
Bitcoin's 'Coinbase premium' posted its longest bullish streak since October's record high of $126,000. These price movements occurred amid broader market responses.
Another DeFi protocol lost millions in a hack, which occurred days after the KelpDAO breach.
