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Whales Are Bailing: Why AAVE Just Crashed 22% After the $294M KelpDAO Hack
TL;DR
AAVE's price plummeted 22% following a $294 million hack of KelpDAO, which compromised its security. Large investors, or whales, rapidly sold off their AAVE holdings in response to the crisis.
Key points
- KelpDAO was hacked for nearly $300 million
- AAVE's price dropped 22% after the hack
- Whales sold off significant amounts of AAVE
Mentioned in this story
KelpDAOAaveCompoundEuler
rsETH
The cryptocurrency industry saw the most violent hack of 2026 on Saturday evening when an unknown perpetrator breached KelpDAO’s security and drained almost $300 million worth of its liquid staking token, rsETH.
They managed to act quickly, depositing the stolen funds into several lending protocols, borrowing money against them, and one of them just experienced a massive investor exodus as its own token crashed hard.
CryptoPotato explained in detail the events that took place on Saturday evening from information provided by the security experts at Cyvers. The bad actor compromised KelpDAO’s bridge contract, deposited the stolen rsETH into Aave V3, Compound V3, Euler, and other lending protocols, used it to borrow substantial amounts of WETH, and created more than $236 million in debt.
Although Aave, alongside SparkLend and a few other protocols, reacted by freezing certain affected markets, it seems investors were more than dissatisfied by the events, especially whales.
Lookonchain data show that several large market participants holding a sizable portion of AAVE went on a selling spree as the asset’s price started to nosedive. A whale identified as smaugvision sold $2.06 million worth of the token for USDC, another one disposed of $2.05 million, and a third one swapped $1.95 million worth of AAVE for $1.18 million in ETH and 10.11 WBTC.
Due to the KelpDAO exploit creating bad debt on #Aave, $AAVE has dropped over 18% today. 🚨
Whales are dumping $AAVE.
• smaugvision sold 20,015 $AAVE for 2.06M $USDC at $103 avg.
• Whale 0xFC56 sold 20,000 $AAVE for 2.05M $USDC at $103 avg.
Q&A
What caused AAVE's price to drop 22%?
AAVE's price fell 22% due to a significant hack of KelpDAO, where nearly $300 million was stolen and deposited into various lending protocols.
How much money was stolen in the KelpDAO hack?
The KelpDAO hack resulted in the theft of approximately $294 million worth of its liquid staking token, rsETH.
What actions did whales take after the KelpDAO hack?
Following the hack, several large investors sold off their AAVE holdings, with one whale selling over $2 million worth of the token.
