🚨 $AAVE e Under Pressure: $292M Kelp DAO Exploit Triggers Liquidity Shock Across DeFi
Aave is facing intense market stress following a major incident involving Kelp DAO’s rsETH, which reportedly resulted in a $292 million exploit and triggered widespread panic across the DeFi ecosystem.$ETH
According to reports, the attacker managed to drain approximately 116,500 rsETH from the LayerZero bridge connected to Kelp DAO. These assets were then deposited into Aave V3 as collateral, allowing the borrowing of nearly $236 million in WETH.
The critical issue now is that the deposited rsETH is no longer properly backed, leaving these positions effectively unliquidatable. This has left Aave exposed to an estimated $280 million in bad debt that the protocol may struggle to recover.
As fear spread across the market, a wave of withdrawals followed, pushing total ETH outflows to around $5.4 billion. Notably, Justin Sun alone reportedly withdrew 65,584 ETH (worth roughly $154 million).
The situation escalated further as $ETH ETH utilization on Aave hit 100%, meaning liquidity for withdrawals is now extremely limited.
This event is being described as one of the first real stress tests for Aave’s Umbrella safety module, and potentially the largest DeFi exploit observed in 2026 so far.
The situation is still developing, and the full impact on Aave and the broader DeFi market remains uncertain.
#DeFi #Aave #CryptoNews #Ethereum #Exploit