Curve's Egorov Flags Non-Isolated Lending Risks After Kelp DAO Exploit

April 19 — Curve founder Michael Egorov said he hopes Aave can address fallout from the recent Kelp DAO exploit, which he claimed resulted in roughly $292 million in losses and left Aave with bad debt. Egorov argued the incident highlights a core vulnerability of the widely used "non-isolated lending" model: it scales well, but concentrates risk, making rigorous risk management essential—an area where he noted Aave has historically performed strongly. He outlined potential alternatives, including a fully isolated design like Curve Finance's market, or a hybrid approach that is more complex to implement but workable. Egorov added that the market has yet to fully appreciate the benefits of these structures, and suggested Aave v4's hub-and-spoke architecture could be a move toward a semi-isolated, more secure framework.