Overview
- The attacker on Saturday used a forged LayerZero message to release 116,500 rsETH worth about $292 million, then moved fast before defenses kicked in.
- They posted the unbacked rsETH as collateral on Aave to borrow ether, creating an estimated $177–200 million hole that Aave now needs to address.
- Aave froze rsETH markets on V3 and V4 and said its own contracts worked as designed, yet liquidity dried up as users rushed to withdraw and a core pool hit 100% utilization.
- Kelp DAO paused rsETH across mainnet and several layer-2 networks within 46 minutes and said two later drain attempts failed, while SparkLend, Fluid, Lido’s earnETH, and Ethena paused related exposure as a precaution.
- On-chain firms say roughly $250 million was converted to ETH and funneled through Tornado Cash, recovery is uncertain, Aave’s TVL fell by about $6 billion, and governance now weighs whether its new Umbrella backstop can cover the losses.