KelpDAO Hack Spreads to Solana Liquidity Pools

The fallout from the $293 million KelpDAO exploit has spilled over from Ethereum into the Solana ecosystem, draining USDC liquidity pools on Kamino Finance and locking depositor funds. This cross-chain contagion served as a stark stress test for the interconnected architecture of decentralized finance: a single bridge exploit triggered a chain reaction across multiple blockchains within just a few hours, MEXC reports.

Kamino Pools Under Pressure

 Data published by Wu Blockchain on Sunday revealed that the Prime Market USDC pool on the Kamino platform—holding approximately $178 million in deposits—reached 100% utilization. Every single dollar deposited had been loaned out, leaving no liquidity for withdrawals. The Stakehouse USDC and RockawayX RWA USDC vaults surpassed 95% utilization, causing borrowing rates to spike: jumping to 8.92% in the Prime Market and 10.2% in the Main Market.

The pressure extended beyond Kamino. The USDC pool on Jupiter Lend reached roughly 99% utilization out of a total supply of $421 million, with $340 million currently out on loan. Marginfi and Save Finance also recorded heightened utilization at 88% and 70%, respectively. Users attempting to close leveraged positions or simply retrieve their stablecoins faced significant delays or a total inability to access their funds.

Anatomy of the KelpDAO Exploit 

The crisis began on Saturday at 17:35 UTC, when an attacker exploited a vulnerability in the LayerZero-based KelpDAO bridge. The attacker minted 116,500 rsETH—roughly 18% of the token's total circulating supply—valued at approximately $293 million. The stolen tokens were swiftly deposited as collateral into lending protocols, including Compound and Euler, allowing the attacker to borrow over $236 million in WETH, which was subsequently distributed across the Ethereum and Arbitrum networks. KelpDAO paused its contracts within 46 minutes, but the damage was already irreversible.

Aave froze rsETH markets in its V3 and V4 versions, and at least nine other DeFi platforms implemented emergency measures. The crypto market reacted swiftly: the price of Ethereum dropped, while the Aave token lost approximately 10% of its value.