KelpDAO Exploit Triggers $14B DeFi TVL Slide as Aave Sheds $8B

The fallout from the KelpDAO exploit, which drained nearly $300 million, rippled through decentralized finance over the weekend as users rushed to pull funds from major protocols, with Aave bearing the brunt. The attack, dated Apr. 18, involved the removal of roughly 116,500 rsETH. Those assets were then used as collateral across multiple DeFi venues, setting off protocol freezes, liquidity strain and a buildup of bad debt that was heavily concentrated on Aave. Data from defillama.com shows total DeFi TVL falling by about $14.17 billion, sliding from $99.49 billion to $85.32 billion. Aave's TVL dropped 32.44% over the past seven days to $17.038 billion. That represents just over $8 billion, or 57.73% of the total TVL that exited DeFi since Apr. 18. Aave, previously the largest DeFi protocol by TVL, has been overtaken by liquid staking platform Lido. Outflows spread across the sector. Over the past seven days, Morpho fell 9.62%, Ethena slipped 7.79% and Sky (formerly MakerDAO) declined 9.76%. Spark contracted about 31.6%. Curve Finance fell 11.09% and Pendle declined 12.4%. Larger drawdowns included Solv Protocol at 68.09%, EulerDAO at 51.74% and Predict Fun at 51.64%. Merlinswap dropped 42.4%, Overnight Finance fell 40.13% and Sentora declined 38.52%. Abracadabra lost 33.42%, Apebond 33.34% and Vectis Finance 30.69%. Re7 Labs slid 30.09%, followed by Kumbaya at 28.41%, Treehouse at 26.46% and Dolomite at 24.7%. Not all segments weakened. Liquid staking protocols, realworld asset (RWA) products and related strategies posted gains over the same seven-day window. The episode underscores how tightly linked collateral and liquidity channels can transmit a localized exploit into systemwide stress, accelerating capital flight even as pockets such as liquid staking and RWA continue to draw inflows.