Aave faces $230M loss from DeFi exploit

Decentralized finance protocol Aave is confronting potential losses ranging from $123 million to $230 million following a bridge exploit on Kelp DAO. The exact financial impact hinges on how Kelp DAO manages the shortfall, with one scenario suggesting shared damage across all rsETH holders and another indicating losses confined to Layer 2 solutions. This incident highlights the ongoing security vulnerabilities within the DeFi ecosystem and the significant financial risks associated with interconnected smart contracts and cross-chain bridges.