The $13 billion DeFi wipeout in two days, and it started with KelpDAO attack

Markets Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email The $13 billion DeFi wipeout in two days, and it started with KelpDAO attack Multiple lending and yield protocols are posting double-digit percentage declines in TVL, though token prices are seeing a limited decline. By Sam Reynolds | Edited by Omkar Godbole Apr 20, 2026, 4:51 a.m. Make preferred on What to know : Aave has seen $8.45 billion in deposits exit over 48 hours, driving a $13.21 billion slide in total value locked across decentralized finance platforms after attackers used stolen rsETH as collateral. The disruption stems from a $292 million exploit of Kelp’s bridge that left rsETH unbacked, prompting lending protocols to freeze affected markets and spurring widespread user withdrawals. While deposits have fallen sharply, major DeFi tokens such as AAVE, UNI and LINK have slipped only modestly, even as the incident underscores systemic risks in cross-chain bridge verification and DeFi’s tight interconnections. In this article BTC BTC $ 74,605.51 ◢ 1.45 % The decentralized finance (DeFi) ecosystem is experiencing a sharp capital outflow following the weekend exploit of the KelpDAO protocol. Leading DeFi lending platform Aave has lost $8.45 billion in deposits over the past 48 hours, driving a broader $13.21 billion decline in total value locked (TVL) across DeFi. TVL refers to the combined dollar value of crypto assets deposited across DeFi protocols, such as Aave, and is widely used as to measure liquidity and overall market activity. Total value locked across DeFi fell from $99.497 billion to $86.286 billion, while Aave’s TVL declined by $8.45 billion to $17.947 billion over the same period, according to DefiLlama. 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. The move stems from a $292 million exploit of Kelp’s bridge that allowed attackers to use stolen rsETH, a liquid re-staking token widely used in DeFi, as collateral to borrow funds on lending platforms. Because these stolen tokens lacked legitimate collateral backing, borrowing against them created potential shortfalls for lenders. It’s similar to conning a traditional bank by depositing fake fiat and taking out loans against it, ultimately leaving the lender with bad debt. Protocols responded by freezing affected markets, while panicked users withdrew funds, leading to a broad decline in total value locked. Token prices have moved less sharply than deposits. The AAVE token is down about 2.5% over 24 hours, while UNI and LINK are down less than 1% over the same period, according to CoinDesk market data. Peter Chung, head of research at Presto Research, said in a note the incident highlights risks in cross-chain infrastructure, particularly in verification systems used by bridges. Early analysis suggests the issue may have originated in the verification layer rather than in smart contracts themselves. Chung added that the episode also shows how interconnected DeFi protocols can transmit shocks beyond the initial point of failure, with withdrawal activity and market freezes extending to platforms without direct exposure to the exploit. DeFi More For You RaveDAO's RAVE token collapses 90% in a day as exchange probes widen By Shaurya Malwa 14 hours ago The token traded at $1.15 on Sunday, down from a $27.33 peak on Friday, wiping out more than $5 billion in market cap as investigations into Binance and Bitget advance. 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