The Kelp hacking incident exposed the structural risks of the DeFi lending platform Aave, leading to a $6 billion reduction in its deposits.



The attacker used depleted rsETH as collateral to borrow wrapped Ether, causing Aave tokens to drop 16% in value, with a large amount of deposits being withdrawn from the protocol, forcing Aave to quantify its bad debt.
AAVE-1.76%
ETH0.37%
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