KelpDAO exploit triggers $13B drop in DeFi TVL, driven largely by liquidations

KelpDAO was hit by a $292 million exploit that coincided with a $13 billion decline in DeFi total value locked (TVL). Market data suggests most of the drawdown was driven by liquidations of leveraged positions rather than permanent loss of underlying capital. In the wake of the incident, users shifted liquidity away from Aave toward Spark. Spark's TVL climbed from $1.8 billion to $2.9 billion. DeFi has seen larger exploits in the past, including attacks involving Ronin, Wormhole and Poly Network. Even so, the KelpDAO episode is likely to raise the perceived risk premium for onchain systems.