Spark posts Q1 profit as TVL jumps after Aave exploit

Spark closed the first quarter of 2026 in profit, reporting $31.5 million in gross protocol returns and a $46.1 million treasury. The protocol reported SparkLend total value locked rose from $1.88 billion to more than $3.4 billion after it halted new rsETH issuance and received inflows following an exploit at rival Aave.

On Jan. 29 Spark’s governance committee voted to stop all new rsETH issuance, citing low and highly concentrated utilization of the asset. Around the same period Aave introduced an rsETH e-mode with a 93% loan-to-value setting.

On April 18 attackers exploited a vulnerability in Kelp DAO’s LayerZero V2 cross-chain bridge. They minted about 116,500 unbacked rsETH tokens, valued at roughly $293 million, and used them as collateral to withdraw wrapped Ether from Aave pools. Estimates of resulting bad debt range from $124 million to $230 million. More than $15 billion in deposits left Aave in the days after the exploit.

A multi-party recovery effort called DeFi United has gathered more than $304 million in ETH commitments to help restore rsETH’s backing. Commitments include 25,000 ETH from the Aave DAO, 30,000 ETH from Mantle, and 30,765 ETH released by the Arbitrum DAO. Aave founder Stani Kulechov pledged 5,000 ETH personally. ConsenSys and Joseph Lubin committed up to 30,000 ETH. The Solana Foundation offered a USDT loan to Aave. Circle purchased AAVE tokens as a show of support.

Spark reported no direct losses from the Aave incident. SparkLend’s TVL increased from $1.88 billion to more than $3.4 billion as capital moved to the protocol. The SPK token rose about 33% since April 18 to roughly $0.036. On April 23 Spark announced its USDT Savings Vault had crossed $1 billion in TVL roughly seven months after launch. The protocol’s Q1 report stated that the second quarter has been proceeding positively.

DeFi United is structured as a decentralized coalition of multiple DAOs rather than a single bilateral backstop. Restoration of rsETH backing requires governance votes and technical actions by parties that include Kelp DAO and the Arbitrum Security Council.