After the attack on the liquid restaking protocol KelpDAO, investors withdrew funds en masse from the Aave platform, opting for more reliable DeFi solutions. The largest volumes of capital shifted to the Spark protocol, which operates within the Maker ecosystem, as well as to stablecoins, particularly USDC. This trend indicates a growing demand for safer and more controlled financial instruments amid market destabilization.
This is reported by Finway
Growth of Spark’s TVL and Shift Towards Stablecoins
According to DeFiLlama analytics, following the KelpDAO incident, the total value locked (TVL) in Spark increased by approximately 10%. The protocol has become one of the key destinations for liquidity moving away from Aave. Users are increasingly favoring platforms that have stricter risk management systems and collateral backing.
Over $10 billion was withdrawn from Aave after the attack, which caused a significant loss of trust in complex DeFi structures. A substantial portion of these funds was transferred to stablecoins — indicating that investors have adopted a wait-and-see strategy amid overall market uncertainty.
“The biggest beneficiaries of the capital outflow from Aave after the hack of the KelpDAO liquid restaking protocol have been more conservative and controlled platforms — notably Spark, associated with the Maker ecosystem, as well as the stablecoin segment.”
Capital Dispersion: New Favorites Among DeFi Protocols
The outflow of funds from Aave did not lead to their concentration on a single platform. As experts note, the capital was distributed across several directions:
- Tokenized real asset (RWA) platforms, such as Centrifuge and Spiko, attracted additional funds through working with tokenized bonds and government securities.
- Liquid staking, for example Lido, maintained a stable position in the market, demonstrating consistent interest in Ethereum without additional risks.
- Stablecoins remain a popular choice for temporary capital preservation, as well as for repaying loans and reducing leverage.
Experts also emphasized that the decline in Aave’s TVL is partially due to technical reasons — mass position closures and reduced credit exposure.
Recall that the attack on KelpDAO, which occurred on April 18, affected the rsETH token and triggered a chain reaction in the DeFi sector. The attacker exploited a cross-chain bridge vulnerability, creating unsecured rsETH, which then became collateral in Aave. According to LayerZero, the incident is linked to the Lazarus Group, raising concerns about industry security.
The subsequent developments deepened the crisis of trust: the Arbitrum network froze over 30,000 ETH related to the hacker, while the perpetrator began to fragment and launder the stolen funds. It is known that 34,500 ETH (approximately $80 million) was laundered after the incident.