Kelp DAO $293M Exploit Prompts Coordinated DeFi Rescue
Kelp DAO experienced a $293 million exploit on April 18, involving 116,500 $rsETH. The exploit involved a forged bridge packet sent to KelpDAO's LayerZero-powered bridge, allowing unbacked $rsETH to be minted on Ethereum without a corresponding burn on the source chain. The attacker then deposited this unbacked $rsETH as collateral into Aave, borrowing stablecoins and $ETH. This left Aave with substantial bad debt, as one recursive looping position accounted for 98% of the $rsETH collateral.
In response, Aave initiated the rapid formation of "DeFi United," a coalition including Kelp, EtherFi, Mantle, Compound, and Lido. Its goal was to restore $rsETH backing, clear exploiter positions, and stabilize affected markets. The collective effort raised over 132,000 $ETH (approximately $300 million) in commitments. Notable commitments included 30,000 $ETH from Consensys and Joseph Lubin, contributions from Compound and Kelp DAO, and $20 million in $USDT from Justin Sun, TRON DAO, and HTX for Aave's Core V3 market. Circle Ventures also purchased $AAVE tokens, with Solana supporting Aave's recovery efforts with $USDT.
On April 28, DeFi United released a technical implementation plan. The plan outlines two tracks: restoring $rsETH backing by depositing $ETH into a bridge lockbox to return the exchange rate to 1.07 $ETH, and clearing exploiter positions via governance proposals to adjust oracle prices and liquidate holdings. A governance proposal was also submitted to the Arbitrum DAO to unlock and recover frozen $ETH assets.
DeFi United's swift actions prevented insolvency and stabilized Aave collateral, easing utilization rates and decreasing $USDT APY on Aave Avax. Despite recovery efforts, Aave's Total Value Locked (TVL) initially dropped by $9 billion (34% drawdown). The exploit generated bearish sentiment across the market, with overall DeFi sentiment scores dropping by 15% in the immediate aftermath. The $AAVE token price increased by 2.1% (24h) and 5.5% (7d).
Developer Proposes Controversial Bitcoin Fork Targeting Satoshi's Dormant Holdings
A developer has proposed a controversial Bitcoin ($BTC) fork, aiming to redistribute over 1 million $BTC from Satoshi Nakamoto's dormant wallets, untouched for more than a decade. This initiative prompted extensive debate across the crypto community.
Critics argue this move directly conflicts with Bitcoin's fundamental principles of decentralization and immutability. The proposal, aiming to redistribute tens of billions of dollars in $BTC, has intensified scrutiny over the network's trust model, which is built on open code, consensus-validated rules, and the principle of 'no one controls Bitcoin.' This debate echoes past contentious hard fork proposals, such as Bitcoin Cash and Bitcoin SV, which similarly tested the community's commitment to Bitcoin's core tenets.
Following the proposal, $BTC's mindshare saw a 1.5% increase, reflecting heightened community discussion. The broader market reacted with caution. Concurrently, $BTC traded at $76,883.00, down 1.17% over 24 hours.
Musk Criticizes Altman; ZachXBT Targets Worldcoin
Elon Musk publicly criticized OpenAI CEO Sam Altman, referring to him as 'Fraud Altman' and highlighting a list of OpenAI controversies compiled by Grok. This escalation follows Musk's co-founding of OpenAI in 2015 as a non-profit, to which he contributed $45 million. Altman was later fired by the OpenAI board in 2023 over undisclosed financial matters before being rehired days later.
Crypto investigator ZachXBT targeted Altman's Worldcoin ($WLD) project, labeling it a 'maker's coin.' ZachXBT's critique focused on $WLD's tokenomics and alleged 'insider power,' asserting the token was issued with 'low circulation and high valuation,' a method compared to practices observed with FTX. The project's distribution of $WLD in developing nations for biometric data reportedly led to a black market for verified accounts, alongside concerns of a 'rapidly expanding' token supply and 'insider OTC sales.' ZachXBT's critique echoes concerns previously raised about projects employing similar token distribution models, often associated with early investor advantage and potential market manipulation.
Community reaction to ZachXBT's report reflected negative sentiment, with multiple posts discussing the findings registering sentiment scores as low as -82 and -78.