“Aave is facing its most severe existential test since its creation,” says businessman.
$7 billion left DeFi in 1 day after the Kelp DAO hack.
The decentralized finance (DeFi) ecosystem is facing one of its deepest crises of trust after the $292 million hack suffered by Kelp DAO on April 18. The event not only drained liquidity from major protocols, such as Aave, but has set off a chain reaction of pessimism among investors and developers.
According to market data, the sector recorded an outflow of $7.48 billion in the last 24 hours, which represents a contraction of close to 8.2% of the total value locked (TVL). This data quantifies the magnitude of the immediate impact.
Faced with such a scenario, the community of this sector of the digital economy It manifests an emotional exhaustion that transcends the technical.
Néstor, investor known as @lodelascripto on social networks, story his personal experience during the early morning of the attack: «At 3 in the morning, while traveling and during the birthday of a person important to me, I had to start undoing all my positions in Aave. The worst thing is no longer the poor performance or the risks due to the security of the protocols, but that you can never be calm.
The entrepreneur pointed out that, unlike other cycles where the profits compensated the risk, “now we are all losing faith in everything.” This personal vision illustrates collective exhaustion.
This loss of security is shared by other participants such as Guillermo (@GuillermoElor), who is a software developer. He sentenced: “I think we will never be calm again with DeFi.” For William, The integration of new technologies into criminal hands aggravates the situation.
«Now they have artificial intelligence (AI); Hackers will always be one step ahead, no matter how many patches they put on the protocols, it will be very difficult to recover,” he warned.
Aave faces an “existential test” after the hack
The technical impact has focused on Aave, considered the pillar of decentralized lending, where The consequences have materialized more harshly. Anndy Lin, industry analyst and literary author, stated that the protocol “is facing its most severe existential test since its creation.”
According to Lin, although a total collapse of this decentralized lending protocol is unlikely, The solvency mechanism is directly affecting users.
«If you are a staker in the WETH Umbrella Vault, you are currently being ‘penalized’. Your staked WETH is being burned without permissions to pay off the bad debt,” explained the analyst, detailing that the security module only covers about 28% of the debt generated by the rsETH hack.
For his part, the strategic director of Spark, under the pseudonym monetsupply.eth, warned on the side effects of Aave mitigation measures. He believes that by lowering interest rates to maintain leveraged positions, the risk could be concentrating in a smaller group of users.
“Any cuts attributable to the rsETH hack are distributed among a smaller set of users who remain trapped in WETH, increasing the loss percentage,” he noted.
Distrust has even reached exchange platforms. Federico Ogue, CEO of the Argentine cryptocurrency exchange Buenbit, confirmed that that platform withdrew everything preventively on April 18 due to the lack of liquidity in the main currencies within that protocol. “What is happening in Aave is very ugly,” he commented.
This decision underscores the fear of systemic contagion that the LayerZero-based Kelp DAO bridge hack has injected into the market.
As reported by CriptoNoticias, the attack against Kelp DAO was executed by forging messaging instructions, allowing the perpetrator to drain 116,500 rsETH, equivalent to 18% of the total supply of said asset.
While the AAVE governance token plummets by 20%, the debate about the losses and invulnerability of these systems remains open. The community seems to agree that, beyond the violated code, what has broken is the psychology of a market that no longer finds refuge in decentralization.