{"id":9313,"date":"2026-08-19T20:35:19","date_gmt":"2026-08-19T17:35:19","guid":{"rendered":"https:\/\/handoli.com\/index.php\/2026\/08\/19\/aave-tvl-still-down-43-since-kelpdao-hack\/"},"modified":"2026-08-19T20:35:19","modified_gmt":"2026-08-19T17:35:19","slug":"aave-tvl-still-down-43-since-kelpdao-hack","status":"publish","type":"post","link":"https:\/\/handoli.com\/index.php\/2026\/08\/19\/aave-tvl-still-down-43-since-kelpdao-hack\/","title":{"rendered":"Aave TVL still down 43% since KelpDAO hack"},"content":{"rendered":"
<\/div>\n

Aave, one of crypto\u2019s largest lending and borrowing protocols, still hasn\u2019t recovered from the April 18 hack of KelpDAO.<\/p>\n

Indeed, the value of all crypto assets in its smart contracts is down 43% since the attack, and 67% below its 52-week high.<\/p>\n

Despite KelpDAO users entrusting $26.4 billion to Aave just prior to the hack \u2014 already way down on the October 2025 peak of $45.9 billion \u2014 there\u2019s a mere $14.9 billion<\/a> worth of assets in the ecosystem today.<\/p>\n

North Korean hackers looted KelpDAO in mid-April, and through its acceptance of KelpDAO tokens as collateral for loans, Aave was left nursing a nine-figure loss.<\/p>\n

North Korea infected the industry<\/h2>\n

Despite Aave itself never being hacked, per its own report<\/a>, its utility for lending cost it a long-held title as DeFi\u2019s biggest platform. Four months later, depositors still have cold feet.<\/p>\n

LayerZero, the KelpDAO bridge\u2019s software provider, blamed North Korea within 48 hours \u2014 an early call that outside investigators later confirmed<\/a>.<\/p>\n

KelpDAO takes deposits of ETH, stakes on Ethereum\u2019s blockchain for yield, and issues a tradeable receipt token called rsETH. The thieves parked stolen rsETH on Aave and borrowed<\/a> real ETH against it, leaving Aave and fellow lender Compound with an estimated $246 million of combined bad debt.<\/p>\n

Aave forcibly liquidated the attacker\u2019s positions, industry allies rebuilt the missing collateral, and by late May, Aave had declared<\/a> every market back to normal.<\/p>\n

Nevertheless, the dollar value of its liquidity pools never recovered and Aave still sits about two-thirds below its October peak.<\/p>\n

\n
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Aave dismisses restraining notice for rescued funds as \u2018finders keepers\u2019<\/a><\/p><\/blockquote>\n<\/div>\n<\/figure>\n

Read more: DeFi sector in $14B meltdown as $290M rsETH hack fa<\/a>l<\/a>lout burns Aave<\/a><\/em><\/p>\n

Aave\u2019s decline matters for DeFi<\/h2>\n

A non-custodial lending app, Aave ended 2025 with $55 billion<\/a> in TVL, worth more than half of the DeFi lending sector\u2019s TVL.<\/p>\n

For a borrower, TVL isn\u2019t an abstraction. It illustrates the dollar equivalent values of deposits and inventory that borrowers can draw on.<\/p>\n

A pool worth 43% less has that much less to lend and much higher volatility.<\/p>\n

According to investigators at Chainalysis, North Korea\u2019s Lazarus Group was probably helping KelpDAO attackers while LayerZero\u2019s own post-mortem<\/a> attributed the operation to a North Korean-linked cluster going by TraderTraitor.<\/p>\n

Protos has also reported<\/a> alleged on-chain links to Bybit and BTC Turk hacks.<\/p>\n

Aave never really recovered from KelpDAO<\/h2>\n

Aave fell about 20% over the day after the theft, from roughly $115 to below $92. The token trades near $89 today, still slightly below its pre-hack level.<\/p>\n

Within two days of the hack, Aave\u2019s deposits collapsed by more than $8 billion and its stablecoin pools hit 100%<\/a> utilization, leaving billions of crypto dollars effectively frozen with no room for anyone else to withdraw stablecoins.<\/p>\n

On April 27, Aave announced<\/a> that a new coalition, DeFi United, had pledged enough ETH to restore rsETH\u2019s full backing. It then liquidated<\/a> the attacker\u2019s positions on Ethereum and Arbitrum on May 6. Replacement collateral flowed into the bridge\u2019s reserves in tranches<\/a> through late May.<\/p>\n

The panic hadn\u2019t ended even by May. TVL kept draining into June, bottoming near $11.9 billion before partially recovering.<\/p>\n

Aave now sits near $14.9 billion, down 43% from hack day.<\/p>\n

According to its own report, Aave\u2019s contracts, oracles and liquidation mechanics worked exactly as designed, yet North Korea was still able to withdraw money using phony collateral.<\/p>\n

Got a tip? Send us an email securely via\u00a0Protos Leaks<\/em><\/a>. For more informed news and investigations, follow us on\u00a0X<\/a>,\u00a0Bluesky<\/em><\/a>, and\u00a0Google News<\/em><\/a>, or subscribe to our\u00a0YouTube<\/em><\/a>\u00a0channel.<\/em><\/p>\n

The post Aave TVL still down 43% since KelpDAO hack<\/a> appeared first on Protos<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

Aave, one of crypto\u2019s largest lending and borrowing protocols, still hasn\u2019t recovered from the April 18 hack of KelpDAO. Indeed, the value of all crypto assets in its smart contracts is down 43% since the attack, and 67% below its 52-week high. Despite KelpDAO users entrusting $26.4 billion to Aave just prior to the hack […]<\/p>\n","protected":false},"author":1,"featured_media":9314,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":[],"rop_publish_now_history":[],"rop_publish_now_status":"pending","footnotes":""},"categories":[147],"tags":[],"class_list":["post-9313","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-invest"],"_links":{"self":[{"href":"https:\/\/handoli.com\/index.php\/wp-json\/wp\/v2\/posts\/9313","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/handoli.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/handoli.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/handoli.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/handoli.com\/index.php\/wp-json\/wp\/v2\/comments?post=9313"}],"version-history":[{"count":0,"href":"https:\/\/handoli.com\/index.php\/wp-json\/wp\/v2\/posts\/9313\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/handoli.com\/index.php\/wp-json\/wp\/v2\/media\/9314"}],"wp:attachment":[{"href":"https:\/\/handoli.com\/index.php\/wp-json\/wp\/v2\/media?parent=9313"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/handoli.com\/index.php\/wp-json\/wp\/v2\/categories?post=9313"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/handoli.com\/index.php\/wp-json\/wp\/v2\/tags?post=9313"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}