🚨 KELPDAO EXPLOIT TRIGGERS $280M BAD DEBT AS DEFI LENDING PROTOCOLS TAKE HIT
A major DeFi exploit has struck KelpDAO, with attackers minting over $270 million worth of rsETH through a vulnerability linked to a LayerZero bridge, intensifying security concerns amid a broader market slowdown.
On-chain data shows the attacker minted approximately 116,500 rsETH before distributing the assets across multiple wallets. The funds were then funneled into major lending protocols including Aave, Compound, and Euler, where the exploiter borrowed large amounts of ETH against the inflated collateral.
The strategy allowed the attacker to extract significant liquidity. Estimates indicate more than 70,000 ETH was ultimately consolidated, following a series of borrowing and swapping transactions across decentralized exchanges.
Before executing the exploit, the attacker routed funds through Tornado Cash, obscuring transaction history and complicating tracking efforts. Shortly after, assets began moving rapidly across wallets, signaling an attempt to evade detection and potential recovery.
In response, affected lending platforms have moved to freeze rsETH markets. However, the damage is substantial, with roughly $280 million in bad debt now impacting the ecosystem. Aave V3 appears to be the most exposed, followed by Compound and Euler.
The incident follows closely on the heels of another major exploit involving Drift, highlighting a renewed wave of attacks targeting DeFi infrastructure during periods of weaker market conditions.
Source: On-chain data / community reports
