Over $10 billion has left Aave following the Kelp DAO exploit, but the capital hasn’t all gone to one place.
After the exploitation of around $292 million broke the horizontal support of rsETH, users have dispersed capital in safer, simpler venues instead of switching to a direct replacement. Aave’s total value locked down has fallen about 40%, according to DeFiLlama data, as deteriorating collateral triggered market freezes, halted liquidations and forced deleveraging, pushing users to pull back or close positions.
Some of that capital has moved into Maker-linked Spark, which has emerged as the clearest relative winner. Its TVL has risen around 10% as users rotate towards infrastructure backed by Sky’s $6.5 billion stablecoin reserves, favoring tighter risk controls over open loan markets exposed to complex collateral.
Elsewhere, major floating stake providers such as Lido have remained relatively stable. This stability suggests that users are not giving up ETH exposure, but removes layers of risk associated with repossess, rehypothecation and cross-chain bridges.
A third pocket of inflows is emerging in real-world asset protocols such as Centrifuge and Spiko, both of which offer exposure to tokenized assets like Treasuries and bonds.
At the same time, a significant portion of funds have moved into stablecoins, especially USDC, as users step out of risk and wait on the sidelines instead of immediately redistributing capital.
Not all of Aave’s decline reflects capital turnover. Part of the decline comes from loans being repaid and positions being liquidated, which mechanically shrinks TVL without a new destination.
The result is a fragmented market response. Capital flows toward simplicity, controlled risk, and even cash, suggesting that post-Kelp, trust in common collateral has weakened rather than shifted elsewhere.
