AAVE TVL crash reach $17B after KelpDAO bridge exploit
AAVE TVL drop reach about $17B afta KelpDAO cross-chain bridge get exploit wey cause around $8.45B withdrawals. Report talk say attackers carry ~116,500 rsETH (roughly $292M) comot and use am as collateral on Aave V3 (Ethereum) to borrow WETH.
When rsETH backing collapse, Aave freeze di related markets and start coordinate with KelpDAO to contain losses for di “unliquidatable” bad debt. Di liquidity shock join with $5.4B–$8.45B withdrawal pressure, mainly ETH/WETH, wey dey raise worry about systemic risk for Ethereum DeFi.
Even tho Aave suffer, traders no fully change long-term sentiment: one Polymarket contract wey ask if “ETH go reach $10,000 by Dec 31, 2026” still dey near 4% YES, show say liquidity for stablecoins still thin and odds fit no move quick without bigger flows.
Wetin to watch next: progress for AAVE–KelpDAO coordination, any security patches, plus wider Ethereum liquidity condition and governance/regulatory signals. For traders, fresh bridge-risk headlines fit quick affect AAVE demand and DeFi leverage.
Bearish
Di na KelpDAO bridge exploit reduce Aave available liquidity direct and e damage trust for collateral pipeline (rsETH → Aave V3). AAVE TVL wey comot down to ~ $17B after ~ $8.45B withdrawals show say capital dey flow out and e get higher chance say market stress go continue until dem contain bad debt and liquidity balance. For short term, traders fit further de-risk AAVE positions as bridge/market-freeze events fit make volatility worse and borrowing demand go fall. For long term, sentiment fit recover only if Aave and KelpDAO solve the “unliquidatable” bad debt well and add security measures to reduce repeat exploits—until then, bias remain negative for AAVE.