# Aave Freezes ETH And LST Markets

*Aave disabled rsETH, WETH, and borrowing on all LST and LRT collateral types after the KelpDAO exploit, sending markets to 100% utilization.*

By [ETH Daily](https://ethdaily.io) · 2026-04-20

news, 2026, april2026, aave, kelpdao, rseth, weth, lst, lrt, defi, lending, tvl

---

As the secondary shock of KelpDAO's exploit rippled through DeFi, large depositors including Justin Sun and MEXC withdrew millions from Aave. To mitigate impact, 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.

Unable to withdraw from the frozen markets, users swapped their collateral to adjacent markets, sending the ETH, USDC, and USDT markets to 100% utilization. The stablecoin supply rates also surged above 13%. When markets are at 100% utilization, lenders are unable to withdraw, and many were stuck paying elevated interest on debt with frozen collateral. Aave's TVL has fallen by $8.4 billion in the last 48 hours.

* * *

Sponsored by
------------

[![Lido Earn](https://storage.googleapis.com/papyrus_images/81f33d00a6b2ca439a0c600e476f7ed085d865617c3c00a46875ed73b4c50710.jpg)](https://stake.lido.fi/earn)

Lido Earn lets you deploy ETH or stablecoins into curated DeFi strategies for optimised yield. Two vaults, daily rewards, automatic compounding, and first-loss protection. Get started on [stake.lido.fi/earn](https://stake.lido.fi/earn)

Notice - April 20, 2026: [**EarnETH has direct exposure to rsETH**](https://x.com/LidoFinance/status/2046250840961216965).

* * *

Disclaimer: Content is for informational purposes only, not endorsement or investment advice. The accuracy of information is not guaranteed.

---

*Originally published on [ETH Daily](https://ethdaily.io/aave-freezes-eth-lst-markets)*