Aave experienced roughly $8.45 billion in withdrawals after KelpDAO’s rsETH cross-chain bridge was attacked in April 2026, according to ChainCatcher. Despite the rapid outflow of capital, the protocol’s core functions did not break down, allowing Aave to complete one of the largest liquidity stress tests recorded in DeFi to date. The incident placed rsETH collateral, cross-chain bridge security and lending-market liquidity under direct pressure at the same time.
Stolen rsETH Triggers Concerns Over Collateral Value
The crisis began with an attack on KelpDAO’s LayerZero cross-chain bridge, in which about $292 million worth of rsETH was stolen. After the attack, concerns emerged around the value and solvency of rsETH as collateral. Because rsETH was widely used as collateral in protocols including Aave, the risk spread quickly into DeFi lending markets and led users to withdraw funds in large numbers.
During the peak of the stress event, utilization in some markets reached 100%, and some users were unable to withdraw funds immediately. In response to the liquidity strain, Aave’s risk management team activated emergency freezes and parameter adjustments designed to limit further risk transmission. The sequence showed how a shock to a collateral asset can simultaneously affect utilization, withdrawal availability and governance-controlled risk settings inside a lending protocol.
Risk Controls Work, While Governance Speed Remains Under Review
Aave founder Stani Kulechov described the episode as evidence of DeFi’s increasing maturity, arguing that the protocol continued to operate as designed under extreme pressure and demonstrated the resilience of an on-chain, rules-based system. At the same time, several independent observers said that while Aave avoided a systemic collapse, the event revealed continuing concentration risk, liquidity risk and contagion risk created by the high degree of interconnection among DeFi protocols.
The behavior of large borrowers was also identified as a factor that can affect system stability beyond what models anticipate. Aave currently manages risk through multiple layers of protection, including loan-to-value limits, liquidation thresholds, supply caps, borrow caps, Isolation Mode, E-Mode and governance mechanisms. These mechanisms generally functioned during the crisis, but observers said governance response speed and risk models still require further optimization to deal with future unknown systemic shocks.
The episode showed that DeFi protocols can withstand a large-scale run without external rescue, but a single stress test does not fully prove that a system is safe. As composability between protocols continues to increase, a problem originating from an external asset or cross-chain bridge can still develop rapidly into a liquidity crisis across the broader ecosystem.