Aave

Aave ($AAVE) is a decentralized money market that runs on the Ethereum blockchain. It’s most notable for its loan system, which allows users to earn interest on deposits and borrow assets with an interest rate. The interest rate is determined algorithmically. Originally named ETHLend in 2017, it was renamed to Aave in 2018. With the rebrand, it also updated its money market function: previously with ETHLend, borrowers and lenders were individually matched. Aave utilizes a liquidity pool system, where crypto loan assets are pooled together. Users must post collateral before borrowing but can only borrow up the value of said collateral. One benefit of Aave is that a user can gain exposure to different cryptos without having to actually own all of them.

Blockchain analytics platform Arkham said that the largest contributors are Mantle and Aave DAO, having raised a combined $127 million.

Aave raises nearly 80% of the $200 million it needs to cover bad debt left by Kelp DAO exploit

Arbitrum

Ethereum

LayerZero 

The standard Constitutional AIP lifecycle runs roughly 49 days from forum publication to onchain execution, a timeline some delegates say is too long.

Aave, Kelp, LayerZero ask Arbitrum DAO to release $71 million in frozen ETH to rsETH recovery effort

Protocols and individual DeFi users have collectively pledged enough to cover the Kelp DAO exploit losses.

Aave proposes 25,000 ETH contribution to DeFi United to plug Kelp DAO exploit hole

Aave founder Stani Kulechov committed 5,000 ether to DeFi United, the ecosystem-wide recovery initiative launched post the $292 million KelpDAO exploit, with Mantle Network following with a 30,000 ETH backstop. Key Takeaways: Aave founder Stani Kulechov personally pledged 5,000 ETH to DeFi United. Mantle Network committed 30,000 ETH, pushing total recovery pledges past 43,500 ETH.

Aave Founder Stani Kulechov Pledges 5,000 ETH to DeFi United as Mantle Network Adds 30,000 ETH Backstop

Aave's founder has pledged 5,000 ETH of his own money as a growing DeFi coalition races to contain the fallout from the KelpDAO exploit.

Aave Leads ‘DeFi United' Push to Contain $292M KelpDAO Fallout

The Mantle team wrote that the loan would generate yield and strengthen the relationship between Mantle and Aave.

Mantle proposes up to 30,000 ETH loan to address Aave bad debt from Kelp exploit

Industry players are coordinating a recovery effort as the year's biggest crypto rattled Aave, with Lido and EtherFi being firsts to offer aid.

Aave rallies DeFi partners to contain fallout from $292 million KelpDAO hack

USDC

Some users pushed back via Aave's governance forum, fearing the changes would fuel liquidations on the lending protocol.

Circle Economist Proposes 50% Rate Ceiling to Snap Aave's USDC Liquidity Crisis

Gordon Liao, Circle's Chief Economist, submitted a governance proposal on April 22, 2026, calling on Aave to raise USDC borrow rates sharply on its V3 Ethereum Core market after a $292 million exploit against KelpDAO left the pool functionally frozen for four consecutive days.

Circle Economist Proposes Higher USDC Rates on Aave V3 After KelpDAO Exploit

Circle Chief Economist Gordon Liao proposed raising USDC borrowing rates on Aave to ease post-KelpDAO liquidity strains.

Circle chief economist floats higher USDC rates on Aave amid KelpDAO fallout

Funds leaving Aave are splitting across safer lending, simpler ETH exposure and off-chain yield, with stablecoins acting as a temporary refuge.

Flight to safety: How Maker's Spark and USDC are winning the $10 billion Aave breakup

CertiK says the lending protocol is in serious trouble while CEO Stani Kulechov tells CoinDesk he does “not have anything useful to say.”

Aave's core markets hit 100% utilization at once, and that's not a good thing

A wallet linked to Justin Sun by onchain analysts withdrew 274 million USDT from Aave just 21 minutes after the protocol froze its rsETH markets on April 18, following the KelpDAO exploit. Key Takeaways: A wallet linked to Justin Sun pulled 274 million USDT from Aave 21 minutes after the rsETH market was frozen.

Onchain Analysts Flag Justin Sun-Linked Wallet's 274 Million USDT Exit From Aave Minutes After rsETH Freeze

Kelp DAO has countered LayerZero's earlier statement, saying the 1-of-1 DVN setup under criticism was shipped as the default at LayerZero.

Kelp DAO shifts blame to LayerZero for $292 million exploit; Aave examines bad debt scenarios

An incident report published by Llamarisk to the Aave forum explains that a bridge exploit targeting KelpDAO's Layerzero V2 rsETH route on Saturday allowed an attacker to extract 116,500 rsETH from Ethereum's OFT adapter without burning any tokens on the source chain.

Incident Report: Llamarisk, Aave Service Providers Detail Kelp rsETH Hack Across Ethereum and Arbitrum Markets

Aave published a report outlining two possible outcomes: around $123 million in losses if damage is shared across all rsETH, or up to $230 million if confined to Layer 2s, with the final impact depending on how Kelp DAO allocates the shortfall.

Aave could face up to $230 million in losses after Kelp DAO bridge exploit triggers DeFi chaos

Bitcoin (BTC) price dropped 2.5% and BNB Token (BNB) fell 2.3% from Friday.

CoinDesk 20 performance update: AAVE price plummets 22.9% over weekend

The aftershocks of the Saturday's KelpDAO hack are spreading through stablecoin markets in ways that were not immediately obvious.

A $300M borrowing spike on Aave signals liquidity crunch after exploit

After attackers drained $291 million in crypto from Kelp DAO-linked infrastructure, DeFi users struggled on Aave to withdraw funds.

Kelp DAO Exploit Sparks Aave Liquidity Crunch, $6.2 Billion Withdrawal Panic

Aave, one of DeFi's largest lending protocols, is managing a liquidity crisis and an estimated $177 million to $200 million in bad debt after attackers siphoned 116,500 rsETH from Kelp's bridge on Saturday, deposited the tokens on Aave V3 as collateral, and borrowed wrapped ether (WETH) against them.

DeFi Lender Aave Battles Withdrawal Crisis After KelpDAO rsETH Exploit

The AAVE token fell 16% and deposits fled the protocol after attackers used drained rsETH as collateral to borrow wrapped ether, leaving Aave to quantify how much bad debt it is now carrying.

Aave records $6 billion TVL drop as Kelp hack exposes structural risk at DeFi lender

A KelpDAO bridge exploit has left $177M-$200M in bad debt in Aave's wETH pool. Here's what happened and what WETH depositors should do now.

‘Withdraw Now'—Inside Aave's Sudden $200M Bad Debt Crisis

Aptos (APT), up 3.8% since Tuesday, joined Aave (AAVE) as a top performer.

CoinDesk 20 performance update: AAVE rises 4.3% as trades flat

Aave DAO voted to hand Aave Labs $31.8 million in combined stablecoin and token funding on April 12, 2026, the first enforceable action taken under founder Stani Kulechov's “Aave Will Win” framework. Key Takeaways: Aave DAO passed AIP 469 on April 12, 2026, granting Aave Labs $25M in stablecoins and 75,000 AAVE tokens.

Aave Labs Secures $25M Stablecoin Grant as DAO Formalizes Revenue Control Model

The proposal directs 100% of application and product revenue back to AAVE token holders, resolving a governance dispute that began when swap fees were quietly redirected away from the DAO treasury in late 2025.

News for Aave Crypto (AAVE)