Aave's Total Value Locked Remains Below Pre-Kelp Hack Levels
Five months after the Kelp DAO hack in April, Aave’s total value locked (TVL) remains $8 billion below its pre-hack level. As of now, deposits on Aave stand at $18.1 billion compared to $26.1 billion before the incident. The attack exploited a vulnerability in Kelp's cross-chain bridge rather than any flaw within Aave’s smart contracts. Attackers manipulated data feeds from the bridge and stole 116,500 rsETH tokens worth approximately $292 million. These unbacked tokens were then used on Aave to borrow around $193 million before being frozen by the platform. The incident highlighted risks associated with using receipt or wrapped tokens as collateral in DeFi lending platforms. A recovery effort involving multiple protocols raised 69,570 ETH against a shortfall of 75,081 ETH. Some funds were released to Aave via Arbitrum’s Security Council in June, but legal actions by creditors are still pending. Despite these efforts, depositor confidence has not fully recovered.
Topics: Aave hacking incident Kelp DAO rsETH TVL decline