'DeFi is dead': the crypto community rushes after the biggest hack of this year that exposes contagion risks
Developers and operators warn about structural risks as a cross-chain exploitation generates fear and causes billions to flee from the platforms #DeFi:
A $292 million exploit of the rsETH token from Kelp DAO triggered a widespread liquidity crisis in DeFi, causing significant withdrawals from major lending platforms, including $AAVE .
Developers claim that the hack originated due to an incorrect configuration of cross-chain verification in the LayerZero-based infrastructure, exposing how flexible 'modular' security, without solid minimum standards, can create systemic risk.
“The rsETH hack is leading to withdrawals across all lending protocols, even in Solana and in unaffected protocols,” 0xngmi said in a post on Sunday, pointing out significant outflows that include “Aave: -$6.2 billion (-23%) in net inflows” and smaller but notable decreases in Morpho, Sky, and JupLend. rsETH is the restaked ether from the Kelp DAO liquid restaking protocol and is a Liquid Restaking Token (LRT) that allows users to earn rewards for staking and restaking ether while keeping their assets liquid, even when they are locked in staking.
$ETH
Developers and operators warn about structural risks as a cross-chain exploitation generates fear and causes billions to flee from the platforms #DeFi:
A $292 million exploit of the rsETH token from Kelp DAO triggered a widespread liquidity crisis in DeFi, causing significant withdrawals from major lending platforms, including $AAVE .
Developers claim that the hack originated due to an incorrect configuration of cross-chain verification in the LayerZero-based infrastructure, exposing how flexible 'modular' security, without solid minimum standards, can create systemic risk.
“The rsETH hack is leading to withdrawals across all lending protocols, even in Solana and in unaffected protocols,” 0xngmi said in a post on Sunday, pointing out significant outflows that include “Aave: -$6.2 billion (-23%) in net inflows” and smaller but notable decreases in Morpho, Sky, and JupLend. rsETH is the restaked ether from the Kelp DAO liquid restaking protocol and is a Liquid Restaking Token (LRT) that allows users to earn rewards for staking and restaking ether while keeping their assets liquid, even when they are locked in staking.
$ETH