AAVE Slides 22% as $294M KelpDAO Exploit Triggers Whale Selling

A major exploit hit the crypto market Saturday night, with an unknown attacker breaching KelpDAO and draining nearly $300 million worth of its liquid staking token, rsETH. Security firm Cyvers said the attacker compromised KelpDAO's bridge contract, then moved quickly to place the stolen rsETH across multiple lending protocols including Aave V3, Compound V3 and Euler. The funds were used as collateral to borrow large amounts of WETH, leaving more than $236 million in outstanding debt. Several protocols, including Aave and SparkLend, responded by freezing certain affected markets. Even so, selling pressure intensified in AAVE, led by large holders. Lookonchain reported multiple whale sales as AAVE began sliding. One wallet labeled "smaugvision" sold $2.06 million worth of AAVE for USDC. Another whale sold $2.05 million, while a third swapped $1.95 million in AAVE for $1.18 million in ETH plus 10.11 WBTC. The token topped out near $120 on Saturday, fell to about $103 as the first wave of selling hit, then dropped to $92, marking a roughly 22% peak-to-trough decline. CoinGecko data show AAVE's market cap has fallen to just over $1.4 billion, pushing it out of the top 50 altcoins by market value.