A $292 million exploit by Kelp, the largest decentralized crypto lender, has rattled the crypto industry, exposing vulnerabilities in the decentralized finance (DeFi) infrastructure and raising concerns about knock-on effects across lending protocols. The attack targeted Kelp’s rsETH token, a yield-bearing version of ether (ETH), and the mechanism used to move assets between blockchains. The attacker manipulated the system to create large amounts of tokens without proper backing, then used them as collateral to borrow and drain real assets from lending markets. This incident is the latest setback to DeFi, coming just a few weeks after the $285 million exploit of Solana-based protocol Drift. The vulnerability of this type of attack suggests a sophisticated actor, with questions still unanswered about how the validator was compromised.