Cryptopolitan
2026-04-22 15:41:46

Aave loses $15B in days as KelpDAO exploit triggers DeFi exodus

Aave saw outflows of $15.1 billion over just three-and-a-half days following the KelpDAO rsETH scandal. Deposits on the top lending platform fell to $30.7 billion from $48.5 billion ahead of the scandal on April 18, down by about one-third from their previous level. Aave and Morpho lost significant deposits, while SparkLend by MakerDAO saw inflows worth over $1.3 billion. Users shifted funds to more secure platforms due to the risk-control measures they adopted. All roads lead back to the KelpDAO rsETH Exploit This vulnerability stems from a complex exploit in the bridge of KelpDAO’s LayerZero V2 implementation of rsETH. This exploit involved the minting of roughly 116,500 uncollateralized rsETH tokens worth about $293 million on April 18, 2026. As reported by Cryptopolitan , Tron’s Justin Sun has publicly appealed to the hacker behind the KelpDAO hack to return the funds. “You can’t spend $300 million anyway,” Sun noted. As it stands, hackers have not headed to that plea. Cryptopolitan reports that these hackers have made heavy Bitcoin purchases, pushing BTC over $78,000. As per the official report by Aave in collaboration with LlamaRisk, which was published on April 20, the possible losses may vary anywhere between $123.7 million, in case KelpDAO decides to socialize the losses equally among all the holders of rsETH through a loss of around 15 percent, to as much as $230.1 million. The $181 million Aave Treasury acts as a cushion, while the DAO has obtained indicative commitments from its ecosystem partners to cushion any shortfall. Nevertheless, the incident reveals that Aave heavily depends on liquid staking derivatives provided by third parties. Outflows hit Aave while Spark gains ground The fallout created one of the fastest liquidity outflows in DeFi. The on-chain evidence showed that stablecoins and ETH were being withdrawn from Aave on a large scale as the use rates increased across multiple protocols. This is due to concerns about socialization or freeze events. Additionally, the total deposit balance in the rival lending protocol, Morpho, fell to $10.2 billion from $11.7 billion prior to the event. Aave market withdrawals. Source. Aavescan.com On the other hand, SparkLend , which functions within the MakerDAO ecosystem, became one of the main beneficiaries. The TVL grew from $1.9 billion to $3.2 billion, with around $1.3 billion in investments over the period. Big moves, such as the shift of large wallets belonging to major investors from Aave to Spark, contributed to the migration trend. It is argued that Spark, owing to its supply caps and price feeds from multiple oracles, offers greater safety compared to some restaking assets. Inflows spike on Spark. Source: Sparklend The inflow and outflow rotation affects the broader DeFi dynamic. Aave’s deposits, once a benchmark for institutional and retail liquidity, now face real-world usage pressures that could compress yields and slow recovery. Aave’s sharp sell-off to a tentative stabilization AAVE’s price was hardest hit by market sentiment, dropping by more than 20% in the days following the hack. The price fell from levels around $115 to as low as $90-$92. There is evidence of whale dumping on the chain, indicating that more than $6 million in tokens were sold off by whales. Aave’s price. Source: TradingView As of April 22, AAVE’s price is $94, suggesting initial signs of consolidation. From a technical perspective, the drop might have been exaggerated, with the 14-day RSI index approaching neutral territory despite its recent excursion into oversold territory. Also, support around the $90 mark has remained intact, given the lack of selling interest. Conversely, a move above $96 would signal relief for the bulls towards $102-$105, barring any additional negative news from KelpDAO’s loss-allocation exercise. Your keys, your card. Spend without giving up custody and earn 8%+ yield on your balance with Ether.fi Cash.

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