The exploit, attributed to North Korea’s Lazarus Group, triggered a major liquidity shock after attackers deposited stolen rsETH into Aave as collateral to borrow wrapped Ether. The event left the lending protocol with around $190 million in bad debt and caused Aave’s TVL to collapse from $26.4 billion to below $14 billion within weeks.

Although recent data shows net outflows from Aave have slowed, the platform’s TVL remains stuck between roughly $14 billion and $15 billion. The incident has renewed concerns across crypto about how interconnected DeFi protocols can amplify systemic risk when large exploits occur within major liquidity ecosystems.