Kelp DAO, the second-largest liquid staking protocol, experienced a significant security breach on April 19, resulting in the loss of 116,500 rsETH, valued at approximately $292 million. The exploit targeted the rsETH bridge contract on LayerZero, with the attacker using Tornado Cash for initial funding before triggering a transfer of rsETH to another address. Kelp DAO has paused rsETH contracts and is collaborating with security experts to investigate. The hack has also impacted Aave, as the attacker used the protocol to collateralize rsETH and borrow wETH, leading to potential bad debt. Aave has frozen the rsETH market and is assessing the situation. The total debt from the attack exceeds $236 million, with Aave accounting for $196 million. Aave's governance team is exploring ways to cover any resulting shortfall, with $50 million available in its Umbrella safety module. AAVE token prices fell nearly 10% following the incident.