Aave could face up to $230 million in losses after Kelp DAO bridge exploit triggers DeFi chaos

What Happened

Kelp DAO's bridge exploit over the weekend exposed lending protocol Aave to potential $230 million losses. An attacker forged transfer messages, creating 116,500 unsupported rsETH tokens, depositing 89,567 as collateral to borrow $190 million in ETH. Aave quickly froze rsETH markets, setting loan-to-value ratios to zero. Resolution depends on Kelp's handling of the shortfall, potentially causing 15% token depeg.

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