Aave leads DeFi "blood transfusion" to stop losses, due to KelpDAO being hacked in a chain reaction of $292 million

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BlockBeats News, April 24 — Aave, together with multiple institutions, launched the “DeFi United” rescue plan to address approximately $292 million in losses caused by the KelpDAO vulnerability attack, and to prevent the spread of non-performing loans.

The attack stemmed from a vulnerability in the integration with LayerZero. The hackers forged uncollateralized rsETH and used it to borrow about $190 million in assets on Aave, causing collateral distortion and triggering a bank run, with the platform’s TVL once evaporating by approximately $10 billion.

Currently, Lido Finance, EtherFi, and founder Stani Kulechov have all proposed capital injection plans. Arbitrum has frozen some funds, but the remaining assets have been transferred via THORChain, making recovery difficult. The current focus has shifted to jointly injecting capital to “patch the hole” and stabilize the DeFi lending system.

AAVE2.02%
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