Aave Guardian: The rsETH Hack Was Not Due to an Aave Protocol Vulnerability, Only Involving the Asset Itself

April 19th: Per HTX data, RAVE plunged below $1, with a 24-hour drop of over 96%. Binance’s RAVE contracts saw their 1-hour funding rate flip from negative to positive, currently at 0.17%. Total 24-hour liquidations for RAVE contracts across all platforms hit $48.62 million, ranking third in the entire network—only behind Bitcoin and Ethereum. Of that total, long liquidations were $26.63 million, while short liquidations totaled $21.99 million.

April 19: RAVE has fallen below $1, trading at $0.98 per HTX data, and is down over 96% in the past 24 hours.

**KelDAO Hack: $2.92B rsETH Stolen via LayerZero Bridge, Aave Responds to Risks** On April 19, multi-chain liquidity staking platform KelDAO was hacked early that morning. The attacker transferred 116,500 rsETH—valued at approximately $2.92 billion—from KelDAO’s LayerZero cross-chain bridge. Roughly 46 minutes later, KelDAO took emergency action: it paused its multisig to freeze core components (including the LRT deposit pool, withdrawal contract, oracle, and rsETH token) and suspended related contracts on its mainnet and several L2 networks. The protocol is conducting root cause analysis with LayerZero and other partners. Two follow-up attacks by the hacker failed, as the pause measures effectively halted further losses. The attacker had attempted to transfer an additional 40,000 rsETH (≈$1 billion); if successful, total losses could have swelled to ~$3.91 billion. ### Aave Impact The Aave token dropped ~10% amid market fears the lending protocol could face defaults. Aav

April 19th — Per LookOnChain data: A trader purchased 2.79 billion ASTEROID tokens for $575 on April 17th. The tokens now exceed $1 million in value, delivering a return of over 1,700x.

April 19th — Defillama data shows the KelpDAO hacker borrowed a substantial amount of ETH from Aave. Following this exploit, a large whale withdrew funds from Aave over security concerns. As a result, Aave’s Total Value Locked (TVL) fell to $219.66 billion, marking a 16.78% drop from yesterday’s $263.96 billion.

April 19: Crypto influencer benmo.eth issued a statement noting the KelpDAO rsETH hack has far-reaching repercussions, with blame falling on both KelpDAO and LayerZero. He outlined the following potential impacts of the incident: - Wrapped assets like LRT (Liquid Restaking Tokens) can’t match the security of native assets. Lending protocols shouldn’t treat them as equivalent collateral. - LayerZero may lose cross-chain market share going forward. Several assets—including usde and usd0—have stopped using its cross-chain solution. Even if business resumes, rebuilding its reputation will be extremely difficult. - Aave’s “security halo” has shattered, and unified lending market risks are again under whales’ scrutiny. Each new collateral asset adds extra risk to existing ones, which is unfair to native assets. Aave V4 and modular lending could emerge as future trends, speeding up the transition. The market will shift focus to the “lending business itself” rather than a single platfor