After the $294 million hack at Kelp DAO last weekend, traders yanked over $15 billion from major protocols. It’s as close as DeFi’s ever come to an old-school bank run, sending shockwaves across DeFi markets. The twist? You didn’t have to use Kelp to feel it.
Aave (CRYPTO: AAVE) saw around $10 billion in outflows while Morpho (CRYPTO: MORPHO) and Sky (CRYPTO: SKY) saw $1.7 billion and $600 million in respective outflows. Even Kamino, a Solana-based lending platform with no direct link to Kelp DAO, saw roughly $280 million take flight.
Welcome to DeFi’s new reality. If you make a bet on one protocol, you need to reckon with every other chain it touches.
The Hidden Risk In Your Yield
DeFi’s core appeal hasn’t changed, but restaking protocols like Kelp DAO have broadened it. Instead of earning from just one source of yield, you can now stack multiple types of return atop the same underlying asset. Deposit ETH, receive a liquid token like rsETH, then deploy that token across lending markets, liquidity pools, or other strategies.
It sounds like a winner: Capital stays productive and your earning potential rises. But so does complexity.
That rsETH token was plugged into multiple major protocols as collateral. When 116,500 rsETH, roughly 18% of its circulating supply, was drained in the exploit, the problem mushroomed. Platforms that had integrated rsETH had to react quickly.
Some paused markets. Others saw users rush to withdraw funds or unwind positions, thinning out liquidity. If you were …
