- The Warmup by Kaizen
- Posts
- $292M Kelp DAO Exploit Sparks Aave Bank Run
$292M Kelp DAO Exploit Sparks Aave Bank Run
PLUS: Polymarket Raises the Stakes in Prediction Markets
Welcome back to The Warmup.
It’s Monday morning, I’ve had two coffees already, and I’m still wondering what the heck Rave DAO is.
Here’s what we’re watching:
Market Snapshot
$292M Kelp DAO Exploit Sparks Aave Bank Run
BTC Pullback Long Setup
Polymarket Raises the Stakes in Prediction Markets
Calendar
Market: Risk-off tone as crypto and equities drift lower while volatility spikes and the dollar firms, signaling growing caution across markets.
$292M Kelp DAO Exploit Sparks Aave Bank Run
What’s going on:
Kelp DAO was exploited via a LayerZero bridge, allowing an attacker to mint ~$292M in unbacked rsETH.
The attacker deposited it into Aave as collateral, borrowed real ETH, and left the protocol with ~$196M in bad debt.
Aave itself wasn’t hacked, but the assumption that rsETH was safely ETH-backed broke.
That was enough.
TVL dropped sharply, withdrawals spiked, and users began borrowing to exit. A classic bank run dynamic.
Protocols like Lido and others quickly froze exposure as contagion spread across DeFi.
What it means:
This is a wake-up call for DeFi.
Liquid restaking tokens were treated like safe collateral. Now that assumption is broken.
Every lending protocol will need to rethink risk models, collateral listings, and cross-chain dependencies.
Yields looked easy. Risk wasn’t.
Now the market is repricing both.
BTC Pullback Long Setup
What’s going on:
BTC had a bearish daily close, increasing odds of a short-term pullback. The plan is to wait for price to move into demand before longing.
Key levels we’re watching:
Support: $71.7K (4H EMA200)
Deeper support: $70K
Resistance: $78K
Breakout target: $80K+
Breakdown risk: Below $70K weakens structure
Directional Bias: Cautiously bullish
What we’re waiting for:
Reaction at support + volume confirmation
No chasing, wait for the dip
This is a buy-the-dip setup, not a buy-now one.
Polymarket Raises the Stakes in Prediction Markets
What’s going on:
Polymarket is reportedly raising $400M at a $15B valuation, up sharply from ~$9B just months ago.
The move builds on backing from Intercontinental Exchange, with plans to bring in more strategic investors and potentially push total funding near $1B.
Meanwhile, rival Kalshi is also scaling fast, with higher volumes and a $22B valuation.
But regulation is tightening, with both platforms already adjusting to new scrutiny.
What it means:
Prediction markets are quickly becoming one of the hottest sectors in crypto and finance.
Capital is flowing in, volumes are exploding, and competition is heating up.
But regulation is the big wildcard. If the space navigates it well, this could become a massive new category.
High risk, high upside. Classic early-stage play.
 | BTC: |
 | MSTR: |
 | WLD: |
 | RAVE: |
Key Events this Week
Major token unlocks:
Plasma (XPL): ~$10M unlock on Apr 25 (~4% of supply)
Macroeconomic data calendar:
Mon (Apr 20):
2nd Round of US-Iran Negotiations: Diplomatic talks resume → key for de-escalation or further geopolitical risk.
Tue (Apr 21):
US-Iran Ceasefire Deadline: Critical deadline → failure to reach agreement could trigger volatility across commodities and equities.
March Retail Sales: Tracks consumer spending → stronger data signals economic resilience, weaker data points to slowdown risk.
March Pending Home Sales: Forward-looking housing indicator → rising sales suggest demand strength, declines hint at cooling market.
Fri (Apr 24):
April Michigan Inflation Expectations: Measures consumer outlook on inflation → rising expectations may pressure Fed policy, falling expectations ease concerns.
Major Earnings Releases:
Wed (Apr 22): Tesla
Thu (Apr 23): Intel
DeFi After the $292M Exploit… What’s Next? |
Even in periods of extreme fear, the biggest opportunities tend to appear when everything feels correlated and uncertain, especially in crypto markets.
The key edge comes from building real conviction and identifying mispriced assets while others hesitate.
At the same time, major structural trends like tokenization, stablecoins, and new capital formation models are quietly laying the groundwork for the next cycle.
The winners won’t be those chasing headlines, but those who understand second and third-order effects before they become obvious.
— The Warmup Team
Always do your own research. This newsletter is supplemental material to help educate readers as they make their own decisions. Projects mentioned here are provided to give a potential early-mover advantage.