“A thief does not own what he steals.” So said Aave founder Stani Kulechov in a statement following an emergency court filing seeking to unfreeze $73 million retrieved by Arbitrum DAO in the wake of a $293 million exploit. The Kelp DAO hack on April 18 left decentralized finance lending platform Aave stuck with $230 million in bad debt after hackers, believed to be from North Korea, used stolen and unbacked rsETH tokens to take out loans on Aave. That led to a bank-run style wave of withdrawals on Aave that effectively froze the protocol. The crypto community has rallied around Aave and Kelp DAO, raising $300 million in donations…
-
-
Crypto Rallies to Help Aave After Hack
$230M donations pledged to help lending protocol unfreeze
Cryptocurrency firms large and small have started donating to DeFi United, a fund set up to help lending protocol Aave recover from the fallout of the $293 million Kelp DAO hack. After the April 18 theft, hackers thought to be from North Korea moved $230 million in stolen rsETH tokens — valued the same as ether, currently $2,300 — onto Aave, taking out loans using the unbacked tokens as collateral. That left Aave with a huge amount of bad debt, which in turn led to a bank-run-style series of withdrawals that left the protocol frozen. Now a group of firms, beginning with staking provider Lido Finance, have pledged donations and…
-
Aave Run Hurts Institutional Adoption of DeFi: JPMorgan
Incident ‘raises questions about the future of DeFi’
The recent $293 million hack of Kelp DAO has knocked $20 billion off of the total value locked (TVL) in decentralized finance, according to JPMorgan. DeFi was the unintended victim of the Kelp DAO hack, with some $230 million worth of fake tokens used to borrow on the Aave lending platform. That bad debt saw Aave lose $10 billion in total value locked, referring to the value of tokens deposited in Aave’s lending pools. But the damage isn’t limited to Aave, said JPMorgan analysts led by Nikolaos Panigirtzoglou in an April 23 report. In the days following the April 18 exploit of Kelp DAO, another $10 billion has moved off…
-
Aave Depositors Stuck As Bad Debt Piles Up
Lending market is the victim in the $292M Kelp DAO hack
Lending market Aave stands to be saddled with as much as $230 million worth of bad debt in the wake of a $292 million hack of the Kelp DAO crosschain bridge. And it could get worse. That’s according to LlamaRisk, Aave’s risk management provider, which outlined two scenarios for the amount of bad debt the lending market will be saddled with. One leaves it with $230 million and another with $123 million. Aave is the fault-free victim of the hack, in which $292 million worth of a token called rsETH was created out of thin air on Kelp DAO and then moved onto Aave, where the hackers took out loans…
