Last updated on April 30th, 2026 at 10:23 am
Decentralized finance may have been shaken by the $292 million KelpDAO rsETH exploit, but it is far from collapsing. That’s the core message from Standard Chartered, which argues the crisis could ultimately strengthen the sector rather than derail it.
In a research note titled “DeFi – Bent, not broken,” the bank’s digital assets lead, Geoffrey Kendrick, said the incident exposed big structural risks, but also triggered a coordinated response that could mark a defining moment for the industry.
📰 Crypto digest: Even after the rsETH security incident, big institutions are still betting on RWA—Standard Chartered says tokenized real-world assets could scale from ~$35B to $2T by 2028, viewing the hack as “bent, not broken.” Meanwhile, Avalanche Foundation is doubling down…
— 0xzx (@0xzxcom) April 29, 2026
From exploit to systemic shock
The crisis began on April 18, when attackers exploited a suspected forged message linked to LayerZero, siphoning off roughly $292 million in rsETH. The stolen assets were then funnelled into Aave, where they were used as collateral to borrow legitimate funds.
That move set off a chain reaction. As confidence wavered, users rushed to withdraw funds, mimicking a bank run. According to Standard Chartered, Aave saw deposits fall by $17 billion, about 38% of its total, while active loans dropped by $5.5 billion.
Beyond the immediate losses, the episode exposed a deeper issue of the growing complexity of DeFi. Lending markets are increasingly built on layered collateral from wrapped to restaked assets, creating mismatches between what is deposited and what is borrowed. When stress hits, those mismatches can amplify contagion.
Industry response signals resilience
A coalition led by Aave and its founder, Stani Kulechov mobilized over $300 million to stabilize the system and restore confidence.
The effort, supported by major ecosystem players, reflects a shift from blame to coordinated recovery. The bank also points to structural upgrades already underway, including Aave V4 and the proposed Ethereum Economic Zone, which aim to reduce reliance on cross-chain bridges, a frequent source of exploits.
Despite the shock, Standard Chartered maintains its bullish outlook, projecting tokenized real-world assets to reach $2 trillion by 2028. In its view, the rsETH crisis hasn’t broken DeFi as it has stress-tested it and may ultimately accelerate its evolution.
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