Whales Are Bailing: Why AAVE Just Crashed 22% After the $294M KelpDAO Hack

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.

BitcoinLinux 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.

https://twitter.com/lookonchain/status/2045741414718267850?ref_src=twsrc%5Etfw” rel=”nofollow noopener” target=”_blank

These considerable market sales only exacerbated AAVE’s price decline. The token had peaked at almost $120 yesterday, but crashed to $103 when the initial sales began. Shortly after, it plunged to $92, which represented a 22% decline from top to bottom so far.

AAVE has fallen out of the top 50 alts by market cap as its own has plummeted to just over $1.4 billion on CoinGecko.

 

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