Aave freezes rsETH markets on V3 and V4 after Kelp DAO bridge exploit

Aave has frozen the rsETH markets on Aave V3 and V4 following the Kelp DAO incident, making the asset temporarily unavailable for lending. The protocol said Aave V3 and V4 no longer hold any rsETH. Aave stressed that its own contracts were not compromised and that the issue is isolated to rsETH, after a bridge vulnerability in Kelp DAO's rsETH was exploited. The freeze is intended to block new rsETH deposits and collateral-backed borrowing while the situation is assessed. The team is reviewing all rsETH borrowing activity on Aave tied to the exploit and said it will provide updates as soon as possible. If the incident results in bad debt for the protocol, Aave said it will consider options to cover any losses. Earlier reports said Kelp DAO's cross-chain bridge was compromised, leading to the transfer of about $292 million in rsETH. (Source: PANews)