Aave could face up to $230 million in bad debt after a weekend exploit in Kelp DAO's rsETH bridge created unbacked collateral. Aave Labs said the attacker deposited 89,567 rsETH into Aave and borrowed roughly $190 million in ETH and related assets across Ethereum and Arbitrum. Aave froze rsETH markets within hours, set loan-to-value ratios to zero, and halted new borrowing against the asset. Around $6 billion in total value locked was withdrawn from Aave after the incident.