CoinDesk: DeFi resilient despite Kelp DAO hack, $13B TVL decline

The decentralized finance (DeFi) sector remains robust despite the recent Kelp DAO hack, which resulted in approximately $292 million in losses, and a subsequent $13 billion drop in total value locked (TVL), CoinDesk reported. While these events may appear catastrophic, the outlet noted that a closer look at the data reveals a different picture. The $13 billion decline in TVL was primarily due to the liquidation of leveraged positions, not an actual loss of capital. The Kelp DAO hack was severe, leading to an $8.45 billion outflow from the lending protocol Aave alone within 48 hours and causing overall DeFi TVL to revert to year-ago levels. However, CoinDesk added that the majority of the withdrawn TVL consisted of highly leveraged positions created by repeatedly collateralizing and re-collateralizing assets. The outlet concluded that DeFi has survived more severe situations in the past, such as the collapse of Terra/LUNA.