AAVE and ZRO tokens declined approximately 20% over one week following the Kelp DAO hack on the 18th, which exposed structural vulnerabilities in the DeFi lending and cross-chain bridge infrastructure. As of the 24th at 11:15 AM (according to CoinMarketCap), AAVE traded at $94.68 (down 16.53% weekly) and ZRO at $1.57 (down 19.92% weekly).
Kelp DAO Hack Details
On the 18th, the Kelp DAO restaking protocol was attacked through a cross-chain bridge vulnerability, resulting in the theft of 116,500 rsETH tokens valued at approximately $292 million. The attacker then deposited 89,567 rsETH as collateral on the Aave lending protocol and borrowed $190 million in ETH and related assets across Ethereum and Arbitrum.
Impact on Aave
The large-scale rsETH deposit as collateral raised concerns that some positions within Aave could transition to potential non-performing loans. In response, Aave froze related markets to contain the risk.
Cross-Chain Infrastructure Concerns
rsETH is distributed across multiple chains, with cross-chain transfers handled by LayerZero’s Omnichain Fungible Token (OFT) standard. The hack exposed vulnerabilities in cross-chain bridge structures, contributing to reduced confidence in the underlying infrastructure and placing downward pressure on ZRO.
Industry Response
The DeFi industry is currently mobilizing around the “DeFi United” initiative to raise funds for market trust recovery and stabilization.
Disclaimer: The information on this page may come from third parties and does not represent the views or opinions of Gate. The content displayed on this page is for reference only and does not constitute any financial, investment, or legal advice. Gate does not guarantee the accuracy or completeness of the information and shall not be liable for any losses arising from the use of this information. Virtual asset investments carry high risks and are subject to significant price volatility. You may lose all of your invested principal. Please fully understand the relevant risks and make prudent decisions based on your own financial situation and risk tolerance. For details, please refer to
Disclaimer.
Related Articles
Ethereum Foundation Sells $24M ETH to Tom Lee's Bitmine
The Ethereum Foundation sold 10,000 ether to Bitmine Immersion Technologies on Friday, according to the foundation's announcement. The over-the-counter transaction was completed at an average price of $2,387 per ETH, totaling nearly $24 million. Bitmine, the digital asset treasury led by Chairman
CryptoFrontier36m ago
Aave Leads Coalition Requesting $71M Frozen ETH Release for rsETH Recovery
Constitutional AIP Filed for Frozen ETH Release
A coalition of major DeFi protocols filed a Constitutional AIP on the Arbitrum forum Saturday morning requesting the network's DAO release approximately $71 million in frozen ETH to support rsETH recovery efforts. Aave Labs is listed as the lead
CryptoFrontier1h ago
XRP Ledger Records $1.1B Net Inflows Over 30 Days, Surpassing Ethereum's $879M
Gate News message, April 25 — XRP Ledger topped all major blockchains (excluding stablecoins) in net capital inflows over the past 30 days, drawing $1.1 billion according to data from RWA.xyz. Ethereum trailed at approximately $879 million in inflows, followed by Stellar with $643 million and BNB
GateNews2h ago
If ETH Breaks $2,421, Major CEX Short Liquidations Could Reach $493M
Gate News message, April 25 — According to Coinglass data, if Ethereum breaks above $2,421, cumulative short liquidations across major centralized exchanges could reach $493 million.
Conversely, if ETH drops below $2,212, cumulative long liquidations across major CEXs could reach $482 million.
GateNews2h ago
Aave, Kelp, LayerZero seek $71M frozen ETH release on Arbitrum
A coalition of major DeFi protocols filed a Constitutional AIP on the Arbitrum forum Saturday morning requesting the network's DAO release approximately $71 million in frozen ETH to support DeFi United, a cross-protocol relief effort organized following the $292 million Kelp DAO exploit. Aave Labs l
CryptoFrontier3h ago
OpenSea CMO Adam Hollander Buys uPEG, Ethereum Token Surges Over 300%
Gate News message, April 25 — OpenSea CMO Adam Hollander purchased a small amount of uPEG, an Ethereum-based token, this evening, stating he was "simply interested in the concept and wanted to experiment." The purchase triggered a sharp rally, with uPEG surging over 300% in a short
GateNews6h ago
