Aave rsETH Liquidity Crisis: $272M wstETH/CBBTC Exits, 100% ETH Utilization
Aave faces renewed liquidity pressure after reports of a KelpDAO rsETH bridge exploit. Large withdrawals from Aave include about 98,032 wstETH (~$272M) and 3,000 cbBTC (~$221.6M), renewing concerns that stolen rsETH was used as collateral on Aave.
The same OTC wallet previously held ~163,405 ETH (~$440M). With direct ETH withdrawals reportedly constrained, it is said to have swapped 7,438 aEthWETH (~$16.83M) into stETH and ETH, receiving 1,930 stETH and 5,272 ETH, with an estimated loss of 237 ETH (~$540k). The wallet reportedly still keeps ~10,000 ETH on Aave.
As the exploit narrative escalated—claims ranged from ~$292M exposure to ~$236M borrowed against rsETH collateral—Aave’s ETH pool reportedly reached 100% utilization. That leaves almost no ETH available for withdrawals, typically worsening exit liquidity during selloffs. AAVE was reported down about 20% on the day, alongside wider reports of roughly $5.4B in ETH outflows as traders reacted to tighter ETH liquidity and additional AAVE selling headlines.
Bearish
The news is bearish for Aave-related pricing in the short term because it combines (1) an exploit narrative tied to rsETH collateral, (2) large wstETH/cbBTC outflows, and (3) reported 100% ETH pool utilization—conditions that directly pressure withdrawal liquidity and increase liquidation/selloff risk. Traders typically front-run uncertainty by reducing exposure and selling AAVE when collateral strength is questioned.
In the longer run, the impact depends on verification and potential remediation (damage assessment, protocol response, and collateral management). If teams confirm losses are contained and liquidity re-stabilizes, downside may moderate. But as long as the borrowing-against rsETH and utilization metrics remain under doubt, volatility and outflow risk are likely to persist.