$293M Kelp DAO Hack Wipes $8B From Aave's TVL

The AAVE token fell nearly 20% in roughly 25 hours, dropping from $112 on Saturday at 6:00 p.m. UTC to $89.5 by Sunday evening.

Crypto News

Total value locked on decentralized lending protocol Aave dropped by nearly $8 billion over the weekend after attackers who exploited Kelp DAO used stolen tokens as collateral on the platform, generating approximately $195 million in bad debt and triggering a wave of withdrawals.

DeFiLlama data shows Aave's TVL fell from roughly $26.4 billion to $18.6 billion by Sunday, stripping the protocol of its position as the largest

platform by deposited assets.

The exploit began Saturday when attackers drained 116,500 Kelp DAO Restaked ETH tokens, worth approximately $293 million, from a LayerZero-powered bridge. The stolen rsETH tokens were then deposited as collateral on Aave v3 to borrow wrapped ETH, according to crypto analytics platform Lookonchain. Lookonchain said the resulting bad debt position on Aave reached around $195 million.

The $AAVE token fell nearly 20% in roughly 25 hours, dropping from $112 on Saturday at 6:00 p.m. UTC to $89.5 by Sunday evening. Lookonchain also identified the MEXC exchange and Abraxas Capital as among the largest single withdrawers from the protocol, pulling $431 million and $392 million, respectively.