Aave's Total Value Locked (TVL) has plunged by 35% to $17.56 billion after a significant hack on KelpDAO, which saw hackers exploit a cross-chain bridge to steal 116,500 rsETH, valued at nearly $300 million. The attackers used approximately $200 million of the stolen tokens as collateral on Aave, triggering fears of unbacked loans if the collateral loses value. This led to a massive withdrawal of over $9 billion from Aave, marking one of the largest capital flights in DeFi history. The incident has caused Aave's token to drop by about 20%, now trading at around $90. The hack underscores ongoing vulnerabilities in the DeFi sector, where rapid growth has outpaced security measures. This event follows a series of recent DeFi security breaches, including a $285 million exploit on the decentralized exchange Drift and the shutdown of Step Finance after a $27 million hack.