@mayankk
Aave just ate a $290M bad debt. If you have ETH staked in Aave V3, your funds are stuck.
Here is exactly how a bridge exploit just paralyzed the biggest lending market in DeFi.
An attacker exploited a bridge bug to mint 116,500 $rsETH out of thin air.
That is $291M in fake value printed in a matter of seconds. But selling that massive amount on the open market would instantly tank the price to zero.
So they used
@aave
as their exit liquidity.
The hacker supplied the phantom $rsETH as collateral on Aave and borrowed massive amounts of real, liquid $ETH against it.
They walked away with the real ETH. Aave is left holding $291M of completely worthless backing.
The fallout is immediate: there is a $290M hole in Aave's ETH market.
Because the real ETH is gone, user withdrawals are effectively paralyzed. If your ETH is in V3, you are locked out.
Are you still trusting decentralized money markets or moving everything back to cold storage tonight?
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