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Kelp DAO

All Stablecoin Beat articles tagged “Kelp DAO”.

Abstract visualization of DeFi lending stress with liquidity pools at maximum utilization and cross-chain collateral failure cascading through stablecoin markets
Insights
Aave Bad Debt Crisis: How the Kelp DAO Exploit Hit Stablecoin Liquidity
Apr 28, 2026 ·22 min read
On April 18, 2026, attackers exploited a bridge misconfiguration in Kelp DAO's rsETH and deposited unbacked tokens into Aave as collateral. They borrowed roughly $190 million in real assets. Aave's stablecoin pools hit 100% utilization. The protocol modeled up to $230 million in bad debt. Aave's contracts worked as designed. The loss came from collateral carrying bridge risk the system had no mechanism to detect.