Zeller’s X post sparks $6.6B Aave withdrawals

On April 18, Marc Zeller posted on X: “If you have WETH on Aave V3 Core, withdraw now, ask questions later.” Within hours, on-chain activity showed about $6.6 billion withdrawn from Aave V3 markets, roughly $3.3 billion of it in stablecoins, and borrowing rates for some stablecoins rose, with utilization on several ETH markets reaching full capacity.

The withdrawals followed an exploit of KelpDAO’s LayerZero-based cross-chain messaging earlier that day. The attacker triggered the release of about 116,500 rsETH, roughly 18% of that token’s circulating supply and valued at about $292 million. The exploit occurred before Zeller’s post and preceded the wave of withdrawals across Aave deployments.

Withdrawals moved across Ethereum mainnet and layer-2 networks where Aave V3 is active, including Arbitrum, Mantle and Base. Aave’s total value locked fell from over $26.3 billion on April 18 to about $19.8 billion in the days that followed. The AAVE token declined more than 18% over 24 hours to trade near $92.

On-chain observers tracked large individual exits. One notable transfer recorded roughly 65,000 ETH withdrawn and moved into a competing lending protocol. Higher ETH utilization on several Aave markets made it harder for some borrowers who had used ETH as collateral to unwind positions as borrowing rates climbed.

Reactions on X were divided. Supporters called Zeller’s post a timely insider alert, while critics said the message lacked context. One user replied, “Think it’s your responsibility to add actual information and context here if you are going to make this claim causing people to panic.” Zeller later wrote that the situation was “under control,” announced the immediate end of the Aave‑Chan Initiative’s Frontier ETH staking program and offered to make ETH from ACI validators available to Aave’s DAO, adding, “It won’t help much, but seems like the right thing to do now.”

Industry participants noted differences in risk policy across protocols. MonetSupply, head of strategy at Spark, wrote that Spark had deprecated rsETH as collateral in January and maintained high maximum borrow rates on its ETH market, a combination that left SparkLend relatively liquid while Aave markets tightened.

Zeller founded the Aave‑Chan Initiative and had been a prominent governance delegate for Aave. He announced his departure in March after a public dispute with Aave Labs over the redirection of swap fees and allegations that Labs‑linked addresses influenced a major governance vote. The ACI wind-down followed that disagreement. Other teams tied to Aave’s ecosystem, including the developer team behind Aave V3’s core codebase and a risk curator, have also announced exits.

Protocol participants and on-chain observers continue to monitor liquidity levels and governance signals across Aave markets as the protocol responds to the combined effects of the KelpDAO exploit and the subsequent withdrawals.