Aave plans a comprehensive upgrade of collateral and listing standards after the KelpDAO security incident

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Odaily Planet Daily News: Aave Labs Chief Legal and Policy Officer Linda Jeng stated during Consensus Miami 2026 that Aave’s past risk framework overly focused on financial risks and price volatility, and in the future, it will include assessments of cross-chain interoperability, network security vulnerabilities, and underlying asset architecture.

This reform was directly triggered by the rsETH incident in April. At that time, attackers exploited a cross-chain bridge vulnerability in KelpDAO to mint approximately 116.5k uncollateralized rsETH (worth about $293 million), and used it as collateral to borrow real WETH, leading to significant bad debt risk for the protocol.

Jeng revealed that Aave will also release a formal “Token Listing Standards Manual” for asset issuers in the future, and will begin evaluating the interconnectedness of DeFi protocols from a systemic risk perspective, rather than analyzing individual liquidity pools in isolation.

Additionally, the “DeFi United” rescue plan, involving participants such as Lido Finance, EtherFi, and Ethena, has been launched to fill collateral gaps and prevent further spread of bad debt. (CoinDesk)

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