Massive Capital Flight Aave deposits plummeted from $45.8B to $29.6B following KelpDAO's $292M exploit, as contaminated rsETH collateral created $200M+ bad debt exposure. Spark Protocol Gains $1.3B While Aave hemorrhaged funds, competitor Spark absorbed $1.3B in deposits with ETH rates spiking to 130%, becoming the safe harbor for fleeing capital. DeFi Contagion Concerns Arbitrum froze $71M in exploited funds, but Charles Hoskinson warned the incident exposes systemic fragility in restaking and cross-chain infrastructure.
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