Kelp DAO’s rsETH cross-chain bridge exploit has spilled into the wider DeFi market. The source material says the attacker took 116,500 rsETH, equal to about 18% of circulating supply, with a total value of roughly $292 million. After the incident, lending platforms moved to contain rsETH exposure, while more than 10 protocols suspended connections tied to LayerZero’s OFT standard.
Lending markets move to contain rsETH exposure
The first impact hit protocols that interacted directly with rsETH. Aave V3 and V4, SparkLend, Compound, Lido, and Fluid froze rsETH-related lending markets or treasury positions after the attack. The immediate goal was to cut off liquidity channels linked to rsETH on the borrowing side.
According to the report, the attacker deposited the stolen rsETH into DeFi protocols as collateral and borrowed WETH against it. That created a deeper problem: the pledged rsETH no longer had underlying asset backing, turning those positions into systemic bad debt. Disclosed figures in the source put Aave’s pressure at nearly $200 million, Compound at about $39.4 million, and Euler at roughly $840,000.
LayerZero OFT becomes a transmission point
The fallout also reached LayerZero’s OFT, or Omnichain Fungible Token, standard. The system allows the same token to move across 20+ chains. It is designed to expand liquidity, but the incident exposed the trade-off in shared trust infrastructure: one breach can send stress across every protocol linked to the same framework.
Several projects chose to disconnect from LayerZero OFT as a precaution. The source says they stressed they had no direct rsETH exposure and viewed the pause as temporary. The list includes Ethena, Lombard, Euler Labs, TRON DAO, ApeCoin/ApeChain, ether.fi, mETH Protocol, Solv Protocol, MOCA Foundation, and River, bringing the total to more than 10 protocols.
AAVE and ZRO post the steepest daily losses
Token prices tied to the event fell sharply. Based on the cited market data, ZRO traded at $1.57 and AAVE at $92.07, with both down more than 20% over the past 24 hours. LDO was listed at $0.37, down 12.11%, while COMP traded at $24.2, down 5.56%.
The breach has moved beyond a single bridge incident. It has already reached collateral systems, lending markets, cross-chain infrastructure, and token prices across the DeFi sector.