DeFi went through a serious stress moment, and the reaction was instant. After the Kelp exploit, Aave saw a sharp drop in TVL as capital moved out quickly. What made it worse was how the attack flowed through the system. A compromised asset got used as collateral, and suddenly the issue wasn’t isolated anymore. Liquidity tightened, withdrawals slowed, and confidence took a hit. This is the tradeoff of deep composability. It makes DeFi powerful, but also fragile under pressure. Does this lead to stronger risk frameworks?
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