'DeFi is dead': crypto community scrambles after this year's biggest hack exposes contagion risks

What Happened

A $292 million exploit of Kelp DAO's rsETH token triggered widespread panic across decentralized finance platforms Sunday. Major lending protocols including Aave experienced significant outflows, with Aave deposits dropping from $26.4 billion to $20 billion as users withdrew funds amid contagion fears. The incident exposed structural vulnerabilities in DeFi architecture, prompting industry warnings.

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