KelpDAO's $292M exploit froze Aave liquidity — Solana Foundation steps in with USDT

A $292 million exploit targeting KelpDAO's rsETH on April 18 sent shockwaves through DeFi's largest lending markets. Attackers allegedly exploited a LayerZero bridge misconfiguration to mint 116,500 unbacked rsETH tokens, deposited them as collateral across Aave, Compound, and Euler, then borrowed roughly $292 million in ETH and other assets. The resulting panic drove WETH utilization on Aave to 100% within hours — at that point, Aave's design prevents withdrawals entirely, leaving lenders queued behind borrowers and liquidations. Oak Research estimated the episode wiped 17% off DeFi's total value locked, with Aave alone seeing over $12 billion in outflows.

The cross-chain response has been the notable subplot. Solana Foundation chair Lily Liu confirmed on April 25 that the nonprofit is lending USDT to Aave to support recovery, framing it as a defence of open finance broadly — not just…