A cross-chain bridge exploit allowed attackers to mint approximately $292M in unbacked rsETH tokens from KelpDAO, of which $190M was borrowed across Aave V3 and V4. The protocol now faces roughly $195M in bad debt that will likely never be repaid. SparkLend, MakerDAO’s lending arm, had limited its rsETH exposure before the incident and captured between $1.4B and $1.7B in new deposits within days, effectively doubling its total value locked. Aave immediately froze its rsETH and WETH markets, while the DAO community is coordinating a $200M fundraising effort, with approximately $160M already raised.
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