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#929 - KelpDAO And LayerZero Exploit, Aave Freeze, Fluid aWETH Redemptions

KelpDAO's $290M LayerZero bridge exploit impacts Aave markets. Fluid enables aWETH redemptions. LayerZero attributes the attack to RPC poisoning.

Quick Take

  • KelpDAO $290m LayerZero bridge exploit.

  • Aave freezes WETH and LST markets.

  • Fluid aWETH Redemption Protocol.

  • LayerZero RPC-poisoning attack.

  • Eth.limo suffers nameserver hijack.



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KelpDAO $290M Loss In LayerZero Bridge Exploit

KelpDAO suffered a $290 million exploit involving its LayerZero-powered cross-chain bridge. An attacker released 116,500 rsETH from the bridge contract on Ethereum mainnet without a corresponding burn on L2, representing roughly 18% of the rsETH circulating supply. The funds were used as collateral across Aave V3, Compound V3, and Euler to borrow an estimated $236 million in WETH. Read more →

Aave Freezes ETH And LST Markets

Large depositors, including Justin Sun and MEXC, withdrew millions from Aave in the hours following the KelpDAO exploit. Aave disabled rsETH markets on V3 and V4, disabled WETH markets across Ethereum, Arbitrum, Base, Mantle, and Linea, and disabled borrowing on all LST and LRT collateral types. Aave's TVL has fallen by $8.4 billion since the rsETH exploit. Read more →

Fluid Launches aWETH Redemption Protocol

Fluid launched the aWETH Redemption Protocol, allowing Aave lenders to swap aWETH collateral for wstETH or weETH at a cost of approximately 2%. Fluid is able to offer the service because it operates a leveraged looping vault holding $144 million in Aave positions that it is looking to unwind. The solution currently only supports swaps on Ethereum mainnet. Read more →

LayerZero RPC-Poisoning Attack

LayerZero published a statement claiming the exploit stemmed from a sophisticated RPC-poisoning attack and attributed the incident to the TraderTraitor subgroup of North Korea's Lazarus Group. LayerZero Labs placed responsibility on KelpDAO's 1-of-1 DVN configuration and stated it will no longer support single-DVN setups. Read more →

ETH Limo Nameserver Hijack Via EasyDNS

Eth.limo, a Web2 gateway that enables ENS domains to be accessed over HTTPS, suffered a domain hijack on April 17, 2026. An attacker tricked the DNS registrar EasyDNS into carrying out a fraudulent account recovery, though DNSSEC contained an attack. Eth.limo plans to migrate to Domainsure, which eliminates account recovery options. Read more →

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