On April 18, attackers exploited a weakness in Kelp's LayerZero bridge and minted roughly $293M of unbacked rsETH. Rather than just cashing out, they dumped the fake rsETH straight into Aave as collateral and borrowed real assets against it. Aave responded by freezing deposits and withdrawals of rsETH. But this didn't contain the damage, it instead spread the contagion. rsETH depositors realized that even with their own funds frozen, they could still use that same collateral to borrow unaffected
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