AAVE After the Kelp DAO Hack Crisis & Bad Debt

AAVE-After-the-Kelp-DAO-Hack-Crisis-Bad-Debt

In April 2026, the Kelp DAO hack (~$292M via rsETH bridge exploit) generated approximately $170M–$230M in bad debt on Aave. This triggered a severe bank run, causing TVL to drop by billions of USD and sending the AAVE price crashing to the current level of $93.9.

Situation on Binance (the largest liquidity venue):

- Exchange Reserve surged sharply → significantly more AAVE being deposited onto the exchange.
- Spot Average Order Size: Plunged to ~$80–$100 (heavy retail participation).
- Big Whale Orders appearing sporadically at the bottom zone.

Liquidity remains thin, with some whales testing positions at low levels. Selling pressure is still present, but signs of a bottom are gradually forming.