The KelpDAO exploit allowed an attacker to siphon unbacked rsETH tokens and deposit them into Aave, triggering one of the sharpest liquidity contractions in recent DeFi history, according to the latest Cryptoquant report dubbed the “ DeFi Contagion.”
Key Takeaways:
The KelpDAO exploit on April 18, 2026, exposed Aave to an estimated $124M-$230M in bad debt within 72 hours.
Aave’s total value…
In a Nutshell
On April 18 the Arbitrum Security Council and SEAL 911 froze 30,766 ETH after Kelp DAO’s rsETH bridge was exploited by the Lazarus Group, which used falsely minted rsETH as Aave collateral to borrow WETH, creating systemic bad debt; $71M recovered, $220M…
