BlockBeats report: On Saturday, April 20, the LayerZero cross-chain bridge of Kelp DAO’s liquid restaking token rsETH was hacked, marking the largest DeFi hack of 2026 to date. The attacker forged LayerZero cross-chain messages to directly withdraw 116,500 rsETH from the bridge contract and deposited them into lending platforms such as Aave to borrow WETH, creating significant uncollateralized bad debt risk. Below is an overview of how various DeFi protocols are responding to the rsETH hack:
Aave releases latest update on rsETH event: rsETH on Ethereum mainnet is fully collateralized. rsETH remains frozen on Aave V3 and V4. WETH reserves are also frozen in affected markets, including Ethereum, Arbitrum, Base, Mantle, and Linea. Aave is actively verifying information and evaluating potential solutions.
Ethena has officially decided to extend the suspension period of the LayerZero OFT cross-chain bridge. Meanwhile, Ethena has released its latest reserve proof, confirming that the collateralization ratio of USDe remains above 100%.
LayerZero states that it has fully understood the rsETH vulnerability incident and has been actively collaborating with the KelpDAO team on remediation efforts since the event occurred, while continuously monitoring the situation. All other applications remain secure. A comprehensive post-incident analysis report will be published jointly with KelpDAO once all information has been gathered.
Fluid has officially launched the aWETH redemption protocol. The aWETH redemption protocol will allow ETH borrowers to redeem their aWETH for wstETH or weETH, immediately restore liquidity, and reduce liquidation risk. If a user has borrowed only ETH, they can fully redeem their position. If a user has ETH collateral and other debts, the collateral will be seamlessly converted to wstETH or weETH while the debt remains unchanged. The protocol’s initial capacity is capped at $1 billion in ETH.
Morpho has temporarily paused the OFT cross-chain bridge for MORPHO on Arbitrum until the root cause of the rsETH incident is identified. Morpho stated that the smart contracts are secure and continue to operate as expected; the exposure is limited, with only approximately $1 million in ETH borrowed against rsETH as collateral, distributed across two isolated markets among thousands of markets; due to Morpho’s fully isolated market design, all other vaults remain unaffected.
Curve Finance has officially announced the suspension of Curve's LayerZero infrastructure, affecting: CRV bridging from the following chains—BNB, Sonic, Avalanche, Fantom, Etherlink, and Kava (other chains continue to use native bridges); and crvUSD fast bridging (slow bridging on L2 remains operational).
Reserve official announcement: Reserve DTF holders are expected to be minimally affected. RSR stakers in the Reserve Protocol's USD3 and eUSD may provide protection as "first-loss capital," but the impact is negligible, and RSR's over-collateralization is sufficient to cover any potential losses. ETH+ and bsdETH contain no rsETH collateral and carry zero risk. As a precaution, Reserve has temporarily paused the minting and rebalancing of eUSD and USD3, as well as RSR unstaking. Redemption functionality remains fully operational.
Maple Finance official announcement: All USDT provided by syrupUSDT on Aave Mantle has been withdrawn. syrupUSDC and syrupUSDT are not affected by the rsETH vulnerability.
Polygon officially stated that it has been actively monitoring the rsETH vulnerability: the Polygon Chain, Agglayer, and the entire ecosystem, including Katana and Vaultbridge, have not been affected by this incident.
EtherFi official announcement: The protocol's liquidity vault is unaffected by the Kelp rsETH incident, and vault users will suffer no loss of funds.
The Hyperwave DeFi project on the Hyperliquid ecosystem has announced that, as a precautionary measure, it has temporarily suspended all LayerZero bridging for Hyperwave assets.