Aave Sees $8.45B in Withdrawals After KelpDAO rsETH Bridge Exploit

ChainThink said Aave recorded roughly $8.45 billion in withdrawals on June 19 after an exploit hit KelpDAO's rsETH bridge. Despite the outflows, Aave's core operations continued normally, turning the episode into a major real-world liquidity stress test. The shock originated from an attack on KelpDAO's LayerZero cross-chain bridge, which led to the theft of about $292 million worth of rsETH. The incident triggered market anxiety over rsETH's collateral value and solvency. Following the exploit, utilization in some Aave markets briefly surged to 100%, leaving certain users temporarily unable to withdraw. Aave's risk team responded by triggering emergency freezes and adjusting parameters to limit potential spillovers. Analysts said the protocol avoided a systemic failure, but the event highlighted structural DeFi lending risks tied to concentration, liquidity constraints, and contagion stemming from interconnected protocols. Aave manages risk through tools including LTV limits, liquidation thresholds, supply caps, borrowing caps, Isolation Mode, EMode, and governance controls. Observers added that governance reaction speed and risk modeling still have room to improve.