Whales Withdraw $1.6B from USDe After KelpDAO Exploit

On-chain data show roughly $1.6 billion of USDe was withdrawn in April, concentrated in a five-day span after a roughly $293 million bridge exploit at KelpDAO. The withdrawals reduced USDe supply to about $4.278 billion.

The redemptions coincided with an estimated $13-15 billion capital exit from decentralized finance and a rotation of assets into USDC and USDT. Large holders redeemed USDe to cover positions or move into plain stablecoins as borrowing costs on lending platforms increased.

On-chain records show more than $600 million was lost to DeFi exploits in the first three weeks of April, and the KelpDAO breach highlighted weaknesses in cross-chain bridge design.

Ethena kept its mint and redeem functions active but paused LayerZero OFT bridges to limit exposure to shared cross-chain vulnerabilities after heavy redemptions. An updated proof-of-reserves filing from Ethena showed about $5.6 billion in collateral and a 101.2% collateralization ratio.

Ethena changed its reserve mix, reducing futures and perpetuals exposure to about 11% and increasing holdings of Treasury bills and overcollateralized loans. Large holders divested ENA and related instruments after roughly $27 million in losses linked to the synthetic dollar.

Aave recorded about $6.6 billion in withdrawals over two days. Protocols including SparkLend and Fluid restricted access to certain assets to contain bad debt, which locked billions and pushed utilization rates to 100% on some markets.

Smaller security incidents also occurred: a $1.2 million domain hijack at Cow Swap, a $13.7 million wallet drain at Grinex, and $7.6 million in fraudulent tokens tied to Rhea Finance.

Market data show a late-2025 depeg on a major exchange that briefly pushed a stablecoin to roughly $0.65 after an approximately $19 billion liquidation. Derivatives funding rates fell to about 4.4%, and those moves coincided with reduced demand for higher-yield synthetic dollars.

Lido received inflows as users left more complex lending strategies, and Singapore Gulf Bank added USDe to its institutional settlement options. On-chain activity shows capital moving into USDC and USDT while protocols that rely on synthetic collateral and cross-chain mechanics experienced increased withdrawals and temporary operational pauses.