This isn’t just an exploit, it’s the kind that spills over into the whole ecosystem🤯. #KelpDAO got hit hard, with the attacker minting 116,500 $RSETH (~$294M). instead of dumping outright, they played it smart, using the minted tokens as collateral on Aave to borrow 106,467 Ethereum (~$250M).

that’s where things get messy. if the collateral (RSETH) isn’t truly backed, then those $ETH loans effectively become bad debt sitting on Aave. and the market reacted fast, whales started pulling #ETH liquidity, pushing Aave’s ETH utilization to 100%, which basically means: no available liquidity left to borrow, higher rates and stress on the lending pool, increased systemic risk if positions unwind....this kind of setup can trigger a chain reaction:
collateral gets questioned → lenders withdraw → liquidity dries up → protocols start feeling pressure.
So we think, this isn’t just about KelpDAO anymore, it’s now a DeFi-wide risk event, especially for anything tied to ETH liquidity.
you can track the attacker’s activity here👇

when exploits start touching lending protocols…that’s when things can escalate fast.