Aave TVL has dropped by $10B since the Kelp attackers used the protocol to borrow $190 million in WETH, depositing unbacked rsETH.
DeFi’s lending landscape is being reshuffled in real time as capital flees Aave in the wake of the Kelp bridge exploit, and a notable chunk of appears to be landing on SparkLend.
Spark’s stablecoin lending protocol SparkLend has seen over $1.4 billion in deposits flow into it in the past few days since the $290 million Kelp bridge exploit on Saturday, April 18, which has continued to rock DeFi since.
Total value locked on SparkLend surged from around $1.89 billion to $3.3 billion as of today, April 22, per DefiLlama data.
Meanwhile, Aave — now the second-largest protocol in DeFi by TLV, and where the Kelp hackers’ faked funds were deposited — has seen its TVL plunge by $10 billion over the same time frame, from above $26 billion to just over $16 billion today.
Per DefiLlama data, Morpho has seen the second-largest outflows in USD aftr Aave.
Active loans on SparkLend have climbed by roughly $500 million over the same period, suggesting the inflows aren’t just parked deposits but fresh borrowing demand.
The April 18 Kelp exploit saw the attacker deposit unbacked rsETH into Aave as collateral and borrowed about $190 million in real wrapped ETH (WETH) against it, leaving the protocol with between $124 million and $230 million in bad debt, depending on how Kelp ultimately allocates losses from the exploit.
Aave has partially unfrozen WETH markets and received indicative commitments from ecosystem participants to help cover shortfalls, as The Defiant reported yesterday.
In the latest Kelp-related update from Aave, the protocol’s founder and CEO Stani Kulechov wrote on X today, “every bit of my energy right now is focused on the outcome for Aave users and the protocol.”
This article was written with the assistance of AI workflows. All our stories are curated, edited and fact-checked by a human.