Odaily Planet Daily reports that monetsupply.eth, Strategic Lead at Spark, warned on X that tightening liquidity in the stablecoin market is pushing conditions into a more hazardous phase. He said roughly 16.5% of the ETH market is backed by rsETH. If losses from rsETH-backed loans are spread across mainnet and external chains, eMode could take a 10% to 15% haircut, with a further 2% to 3% haircut potentially falling on ETH suppliers to reconcile the broader umbrella structure. That risk encourages ETH suppliers to withdraw quickly, pinning utilization at 100%. At current levels, borrowing rates are not high enough to drive repayment from unrelated LST loops (wstETH, weETH) that could free up liquidity. With ETH withdrawals effectively blocked, borrowers who used ETH as collateral to take stablecoins such as USDT cannot unwind positions even as stablecoin borrow costs climb, removing a key mechanism that typically helps keep lending markets stable. He highlighted two distorted incentives that are keeping utilization stuck at 100%: 1) ETH holders cannot reduce exposure to restore healthier LTVs, and liquidators cannot atomically withdraw or sell collateral, raising the odds of bad debt if ETHUSD declines. 2) Users supplying USDT to exit positions are incentivized to maximize borrowing of other stablecoins. The structure is currently yielding positive returns on a temporary basis, lowering exit costs; even if conditions worsen, he estimates at least 75% of the position's value could still be recovered. His conclusion: pooled and restaked lending markets must preserve liquidity at all costs to function. He added that the recent weakening of Slope2's maximum borrowing rate on Aave is weighing on market resilience and materially increasing the risk of a cascading failure.

UPDATE: RAVE tumbled 95% after a sharp run-up to $28. RaveDAO rejected allegations of market manipulation, while Binance and Bitget said they have opened investigations into trading activity suspected to be driven by insiders.

BlockBeats reported on April 19 that the KelpDAO hack left Aave with roughly $177 million to $200 million in bad debt, prompting a wave of whale withdrawals as investors moved to cut risk. DefiLlama data show Aave's total value locked has extended its decline, slipping from about $22 billion earlier in the day to around $20.7 billion. That marks a drop of roughly 21.6% from yesterday's approximately $26.4 billion.

Huoxing Finance reported that on April 19, in the wake of the KelpDAO hack, Aave faced roughly $1.77 billion to $2 billion in bad debt. Large holders pulled sizeable funds from the protocol to reduce risk exposure. DefiLlama data show Aave's total value locked has kept falling from about $22 billion earlier today to roughly $20.7 billion, down about 21.6% from around $26.4 billion yesterday.

Huoxing Finance cited on-chain analyst Yujin as saying Justin Sun withdrew 53,660 ETH, worth about $125 million, from Aave earlier today and has since deposited the funds into Spark. Most of Sun's on-chain holdings—about $2.13 billion—are now parked in Sky and Spark, while roughly $380 million remains on Aave.

ChainCatcher reported that on-chain analyst Yujin said Sun Zhen transferred 53,660 ETH (about $125 million) into Spark after making an emergency withdrawal from Aave earlier today. Most of Sun Zhen's on-chain holdings are now concentrated in Sky and Spark, totaling roughly $2.13 billion, while about $380 million remains on Aave.

A security incident tied to Kelp DAO's rsETH crosschain bridge, valued at nearly $300 million, has sparked a rush for the exits at Aave. More than $5.4 billion in ETH has been withdrawn as users moved to protect funds amid fears that bad debt could build on the lending protocol. According to the report, the attacker deposited rsETH into Aave and borrowed out ETH, leaving Aave with exposure that is difficult to unwind. The impact was immediate: Aave's ETH utilization rate hit 100%, indicating all available ETH in the pool is currently borrowed and there is no remaining liquidity buffer. Large holders helped drive the move. Justin Sun withdrew 65,584 ETH, about $154 million, in a single transaction. Onchain tracker Lookonchain linked the broader $5.4 billion outflow to concerns among sophisticated users about how bad debt could restrict depositors' ability to withdraw. Kelp DAO said it paused rsETH contracts on mainnet and multiple Layer 2 networks after detecting suspicious crosschain activity. The team said it is working with LayerZero, Unichain, auditors, and security specialists to identify the root cause. D2 Finance's onchain analysis pointed to a private key leak on the source chain, raising trust issues with OApp nodes and enabling bridge manipulation. Investigators outlined two potential failure paths: if a legitimate source transaction exists for the relevant nonce, the compromise likely involves the source-side OApp key; if no source transaction emerges, the issue may sit with the DVN, worsened by Kelp's configuration that relied on LayerZero Labs as the sole verifier. Kelp DAO's contracts remain paused as the investigation continues. With Aave's ETH utilization at 100%, depositors cannot withdraw until borrowed ETH is repaid or fresh liquidity enters the pool. The larger question is how any unrecovered losses tied to exploited rsETH positions would be handled across Aave's system, a process that has historically been contentious and slow. Investigators are still compiling full forensics and an attacker cluster map. Updates are expected through Kelp DAO's verified channels as the inquiry advances. Tags: Crypto news

Ripple says accelerating institutional participation could push U.S. spot XRP ETFs toward JPMorgan's projected $4 billion–$8.4 billion in first-year inflows. In a recent report, the blockchain firm said the products surpassed $1 billion of inflows within their first month on the market. According to Ripple, cumulative inflows have now topped $1.50 billion, with the ETF-wrapped products holding more than 769 million XRP. The firm added that more than 30 institutions — including Goldman Sachs — have gained exposure to the token through these wrappers. Ripple noted that inflows have held up even as the broader market has pulled back since October. "It suggests institutions are making considered allocation decisions, not chasing shortterm momentum," the company said. JPMorgan's base-case estimate implies spot XRP ETFs could draw about $4–$8 billion in inflows in the first year. With the first product launching in November through Canary Capital's XRPC, roughly seven months remain to test that trajectory. If inflows reach $4 billion, Ripple said that would represent about 3.15x growth from the current $1.27 billion. Weekly inflows at the strongest pace since mid-January Spot XRP ETFs recorded $55.4 million of inflows last week, the largest weekly total since mid-January. XRP rose from $1.31 to as high as $1.5, a gain of more than 14%, before easing back to around $1.4 at the time of writing, according to SoSo Value. Ripple also pointed to Realized Cap data as supportive of its outlook. Glassnode figures show XRP has seen $4 billion in outflows since February. If the market has already bottomed, Ripple argued, the outflows would be smaller than in prior bear phases. During the 2018 downturn, Realized Cap fell from $23B to $16B, equating to $7 billion in outflows. In the 2022 crash, it slid from $34B to $26B, or $8 billion in outflows. On that comparison, the 2026 pullback would be about half the capital exit seen in 2022, indicating relative resilience in this cycle. Ripple said the "institutional era has begun" and expects momentum to build from current levels, though it remains unclear whether XRP can maintain that resilience if broader sentiment deteriorates further. Final summary • Ripple expects spot XRP ETF inflows could roughly triple to $4 billion by the end of 2026. • XRP saw more than $4 billion in capital outflows in 2026, still lower than in past bear markets.

On-chain analyst Ember (@EmberCN) said Aave recorded $6.6 billion in withdrawals today, with about half—$3.3 billion—coming from stablecoins. The heavy outflow has pushed rates higher across the platform: USDT and USDC deposit yields rose to 13.4%, while borrowing costs increased to 15%.