Aave has frozen the rsETH markets on Aave V3 and Aave V4.
Regarding the KelpDAO hack, Aave tweeted that the rsETH markets on Aave V3 and Aave V4 have been frozen. Aave stated that its contracts were not exploited and that this incident is related to the exploit of Kelp DAO’s rsETH cross-chain bridge. The freeze will prevent new rsETH deposits and rsETH-backed lending. Aave is currently reviewing lending activity involving rsETH on the platform following the exploit and has indicated that, should the protocol accumulate bad debt as a result, it will explore options to cover the deficit.
Earlier reports indicated that Kelp DAO’s cross-chain bridge was hacked, resulting in the theft of approximately $292 million worth of rsETH, exposing Aave V3 to bad debt risk.
