AAVE Token Plunges 17% Amid KelpDAO Exploit; $900M Trading Volume Signals DeFi Shakeup

AAVEUSDT experienced a sharp price decline of 17.18% over the last 24 hours, dropping from 111.80 to 92.59, primarily driven by a major exploit affecting KelpDAO's LayerZero bridge. This incident resulted in bad debt on Aave and led to the freezing of rsETH markets on its V3 and V4 protocols, prompting notable withdrawals by large holders and increased market caution. Additionally, related DeFi protocols suspended LayerZero integrations and rsETH markets to mitigate systemic risk. Trading activity surged, with 24-hour volumes approaching $900 million and AAVE's circulating supply at around 15 million tokens. The heightened volatility and volume underscore the impact of the exploit and broader risk mitigation actions across the DeFi ecosystem.