#kelpdao exploit

➤ Aave founder Stani Kulechov has introduced a new risk framework in response to a $290 million exploit. ➤ The framework includes four layers: Asset Risk, Bridging Risk, Automated Risk Oracles, and Chain Risk, aiming to enhance security and monitoring. ➤ Assets not meeting the new standards will be removed from Aave, impacting its TVL and market position.

➤ Aave proposes a new, multi-layered risk framework to enhance asset listing and monitoring standards across its V3, V4, and Horizon protocols. ➤ The framework, prompted by the KelpDAO exploit, introduces stricter requirements for asset risk, bridge exposure, automated monitoring, and chain deployments. ➤ It aims to mitigate risks associated with collateral assets, bridge configurations, and off-chain infrastructure through continuous due diligence and faster defensive mechanisms.

➤ Aave is considering a comprehensive protocol-wide risk framework and an upgrade to its Pendle PT risk oracle following the KelpDAO LayerZero exploit. ➤ The proposed four-layer framework will assess Asset Risk, Bridging Risk, Monitoring, and Chain Risk, with non-compliant assets being removed from the platform. ➤ The oracle upgrade aims to transition to protocol-owned infrastructure on Chainlink CRE for enhanced transparency and security.

➤ Q2 2026 saw a volatile crypto market influenced by macro factors and a significant Bitcoin sale by Strategy, impacting lending markets and basis trades. ➤ The KelpDAO exploit caused a major DeFi TVL drop, but the ecosystem demonstrated resilience through coordinated crisis management and recapitalization efforts. ➤ Tokenized RWAs, particularly equities, gained momentum due to regulatory engagement and offered a more stable alternative to leveraged crypto strategies.

➤ Onchain investigator ZachXBT has accused US law firm Gerstein Harrow LLP of filing fraudulent claims over $71M in frozen crypto assets linked to North Korea's Lazarus Group. ➤ The law firm is attempting to seize these funds based on an unrelated 2015 judgment, potentially harming actual victims of the recent KelpDAO exploit. ➤ ZachXBT has proposed a community DAO to counter the firm legally, as recovery for victims remains blocked by this legal maneuver.

➤ The KelpDAO exploit resulted in a $13 billion DeFi liquidity drain and severely damaged user trust by exposing hidden centralization in supposedly decentralized systems. ➤ Exploits trigger capital flight, reduce DEX liquidity, and increase slippage, making the ecosystem inhospitable for institutional capital and leading to regulatory scrutiny. ➤ While exploits are devastating, collaborative recovery efforts and a shift towards intent-alignment monitoring are helping to rebuild trust and strengthen the DeFi ecosystem.

➤ Wrapped Bitcoin (wBTC) is enhancing its cross-chain security protocols and temporarily pausing certain transfers following the KelpDAO exploit. ➤ The upgrades are a precautionary measure against similar Decentralized Verification Network (DVN) vulnerabilities that led to a $293 million loss at KelpDAO. ➤ Despite broader DeFi outflows, wBTC has shown resilience with net inflows, highlighting its critical role and the potential systemic risk of an exploit.

➤ Circle has proposed emergency interest rate changes for Aave's USDC pool due to a KelpDAO exploit causing a liquidity crunch. ➤ The stablecoin issuer argues current borrowers are using USDC as an exit mechanism, and higher yields are needed to attract supply. ➤ The proposal includes pausing Aave's Risk Oracle for USDC due to past underperformance and maintainer issues.