DeFi Sector Suffers Record Losses Amid Kelp DAO Exploit

The decentralized finance (DeFi) sector has experienced a significant downturn in recent weeks, with total value locked (TVL) plummeting to its lowest level since last year. The latest blow came in the form of the Kelp DAO exploit on Saturday, which added to the already substantial losses from previous platform breaches.

According to data reviewed by analysts, the sector-wide drawdown reached 5.6% in a single day following the incident, placing it among the most severe since 2024. The Kelp DAO exploit involved an attacker manipulating a cross-chain message to drain rsETH from its LayerZero-powered bridge.

The stolen assets were then used as collateral on Aave, causing further disruption to lending markets. The attack is believed to be linked to the North Korean hacking group Lazarus, according to preliminary findings.