Kelp DAO Hack Sends DeFi TVL Crashing by $13 Billion in Just 48 Hours
The Kelp DAO hack has sent shockwaves through decentralized finance, erasing over $13 billion in total value locked in less than two days and exposing deep structural cracks in cross-chain infrastructure.
The total value locked across DeFi fell from $99.497 billion to $86.286 billion, while Aave’s TVL alone declined by $8.45 billion to $17.947 billion over the same period, according to DefiLlama. The collapse began on Saturday, April 19, when attackers struck Kelp DAO’s bridge in what is now the biggest DeFi exploit of 2026.
The attacker exploited Kelp DAO’s LayerZero-powered bridge to drain 116,500 rsETH, about $292 million and roughly 18 percent of the token’s circulating supply, triggering an emergency pause of core contracts. The stolen rsETH, a liquid re-staking token widely used as collateral across DeFi lending platforms, was then deployed against Aave V3 to borrow wrapped ether, setting off a chain reaction.
Though Kelp was able to pause the protocol within 46 minutes, the damage had already become irreversible. AMBCrypto The Kelp DAO hack DeFi TVL fallout accelerated as users rushed to pull funds from any protocol exposed to rsETH.
The Kelp DAO hack led to about $195 million in bad debt, 100% utilization in USDT and USDC pools, and withdrawal constraints on roughly $5.1 billion in stablecoins. Systemic-risk concerns grew as whales including MEXC and Abraxas Capital withdrew hundreds of millions of dollars, and AAVE fell 20%.
To prevent further financial damage, Aave, the largest lending platform in DeFi, immediately froze its rsETH markets on both its V3 and V4 platforms, clarifying that its own smart contracts were not compromised. “Freezing the rsETH markets prevents new deposits and borrowing against rsETH collateral while the situation is assessed,” the platform stated.
The Kelp DAO hack DeFi TVL damage was not limited to Aave alone. Protocol-level data shows double-digit percentage drops across platforms including Euler, Sentora, and Aave, with losses concentrated in lending, restaking, and yield strategies tied to the affected collateral.
SparkLend, Fluid, and Upshift all activated emergency asset freezes. RaveDAO’s RAVE token suffered the most dramatic collapse, crashing 90% from $27.33 to $1.15, erasing over $5 billion in market cap in a single session.
The breach at Kelp DAO pushes the total number of attacked crypto businesses and protocols to at least 12 since the beginning of April, with digital asset platforms losing more than $605 million to cyberattacks in just under 20 days.
The incident has reignited urgent debate about the systemic risks that liquid restaking tokens introduce to DeFi’s lending ecosystem, and whether bridge security has kept pace with the complexity it now supports.
