Standard Chartered's global head of digital assets research, Geoffrey Kendrick, said on April 29 that the decentralized finance ecosystem has taken a hard hit from the KelpDAO rsETH exploit but ultimately not a fatal one. In a note titled "DeFi – Bent, not broken," shared with The Block, Kendrick argued that while the April 18 theft of $292 million worth of rsETH exposed real systemic risk in DeFi, the industry's response may prove to be an "antifragile moment."
The Exploit and Immediate Impact
The rsETH theft began on April 18 through a suspected forged LayerZero message, then spread into Aave, the sector's largest lending protocol, as the attacker deposited unbacked rsETH as collateral and borrowed legitimate assets against it. The attack triggered bank-run-style withdrawals across the protocol.
According to Standard Chartered, Aave lost $17 billion in deposits, representing 38% of the total, and $5.5 billion in active loans, or 31%, as fear spread through the market.
Rescue Coalition and Recovery Efforts
Kendrick said a coalition led by Aave and founder Stani Kulechov has committed more than $300 million to restore normal operations. According to The Block's reporting, the rescue effort, known as the "DeFi United push," has drawn support from Aave DAO, Arbitrum, Consensys, Joseph Lubin, Mantle, Lido, and others as the industry moved from finger-pointing to recapitalization. The effort aims to normalize conditions as yields fall back and net deposits recover.
![Aave stabilizing after rsETH fallout]()
Aave stabilizing after rsETH fallout | Image: Standard Chartered
Structural Issues and Solutions
Standard Chartered's note treats the crisis as more than a temporary patch, arguing instead that it is accelerating structural changes already in motion. Kendrick noted that DeFi's biggest risk is no longer just volatility, but complexity.
The Kelp episode exposed an asset-liability mismatch inside lending markets as increasingly complex collateral—including wrapped, staked, and restaked assets—sat against liabilities with very different risk characteristics. This mismatch was amplified by concentrated looping trades, the kind of leverage-maximizing structure DeFi is designed to enable when things work normally and the kind that can magnify contagion when they do not.
Standard Chartered points in particular to Aave V4, launched in late March, and the planned Ethereum Economic Zone (EEZ), which it says should let Aave reduce reliance on bridges that have been the main attack vector in many of crypto's biggest hacks. Additionally, Kendrick noted that Aave's situation is already normalizing after DeFi players banded together to plug the hole.
$2 Trillion RWA Outlook Unchanged
Despite the crisis, Standard Chartered still expects tokenized real-world assets to reach a $2 trillion market cap by the end of 2028, up from $35 billion in October 2025. The bank said that forecast still rests on continued growth in DeFi banking and stablecoin liquidity.
For this reason, Standard Chartered sees this crisis as important beyond Aave or rsETH. The recent exploit, in its view, does not break that thesis, but rather stress-tests it. The bank has repeatedly argued that tokenized funds, money-market products, and broader RWA rails can scale sharply if the underlying DeFi plumbing keeps maturing. According to Kendrick, the Kelp crisis, ugly as it was, may end up speeding that maturation instead of stopping it.
