By Jack • April 19, 2026 10:31 pm •
The DeFi space took a major hit this weekend, and the damage is still spreading.
Kelp DAO, one of Ethereum’s largest liquid restaking protocols, was exploited for approximately $292 million after an attacker spoofed cross-chain messages through LayerZero’s bridge system. The stolen haul: 116,500 rsETH tokens, roughly 18% of the token’s entire circulating supply.
But the exploit itself is only part of the story. What happened next sent ripple effects through some of the biggest names in decentralized finance.
The attacker didn’t just drain the tokens and disappear. They deposited the stolen rsETH as collateral on major lending protocols including Aave V3, Compound V3, and Euler, then borrowed approximately $236 million in ETH against it. That
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