Spark TVL Surges as Aave Grapples with Liquidity Crisis

Kelp DAO's rsETH is issued across chains through the LayerZero bridge and is intended to be backed by assets locked on Ethereum. On April 18, 2026, an attacker forged a cross-chain message and released 116,500 rsETH without sufficient backing, then pledged the tokens on Aave to borrow WETH. The exploit rapidly spread bridge-related risk into the DeFi lending market.

Spark had delisted rsETH in January 2026, avoiding exposure. On-chain data on April 22 showed Aave's total deposits falling to $30.7 billion from $48.5 billion. SparkLend's TVL rose by about $1.3 billion, climbing to $3.2 billion from roughly $1.9 billion, while the annualized yield on ETH deposits briefly reached 130%.