"The exploit began at 17:35 UTC, at Ethereum block 24,908,285, where attackers targeted Kelp DAO's Layerzero V2 bridge, minting 116,500 unbacked rsETH tokens valued at approximately $292 million."
"Aave's Protocol Guardian responded within hours, freezing all rsETH and wrsETH reserves across V3 deployments, setting loan-to-value ratios to zero, and adjusting interest rate models to manage liquidity pressure."
"The formal incident report published by Aave Labs and risk manager Llamarisk modeled two loss scenarios, estimating bad debt on Aave to be between $123.7 million and $230.1 million depending on how Kelp DAO socializes the shortfall."
Aave's response to the Kelp DAO exploit involved freezing rsETH reserves shortly after the incident, which resulted in significant bad debt. The exploit targeted the Layerzero V2 bridge, allowing attackers to mint unbacked rsETH tokens. Aave's Protocol Guardian acted quickly to mitigate the situation by adjusting loan-to-value ratios and freezing reserves. DeFi United raised $160 million to help backstop Aave, with ongoing governance votes regarding Aave DAO's contribution. The incident report outlined potential loss scenarios, indicating substantial financial implications for rsETH holders.
Read at news.bitcoin.com
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