DeFi Saver Newsletter: May 2026

April certainly was a rough month for DeFi, marked by a wave of exploits, fast-moving market reactions, and major movement of the DeFi community coming together as a whole.

So, for this issue, we’ll cover:

1. Ecosystem news: April DeFi exploits and community relief efforts;
2. DFS news and updates: DFS tools for managing Aave position amidst the rsETH hack;
3. DeFi Saver Stats for April;
4. Position of the month.

DeFi Saver news & updates

The month of April was anything but gentle on crypto, with 28 exploits draining around $635M worth of funds.

Out of these, two major incidents exposed structural risk across the DeFi ecosystem, highlighting that vulnerabilities may extend far beyond smart contract risk, as attackers often utilise social engineering tactics.

As we’ve already mentioned in our previous Newsletter,  on April 1, the Drift protocols suffered a $285M loss due to an elaborate, preplanned attack. The attackers had spent months impersonating a quantitative trading company in order to build credibility with core contributors (meet them at industry events, maintain ongoing communication, and even deploy their own capital to appear legitimate).

Shortly after, the April 18 KelpDAO hack sent waves throughout DeFi after attackers breached its Layer Zero bridge contract and stole roughly $292M in rsETH. 

Unable to offload such a large amount, the attacker used the tokens as collateral across major lending protocols like Aave, Compound, Fluid, and Euler, triggering widespread risk controls.

In response, Aave froze key markets and set LTV ratios to zero, while Compound paused multiple lending pools. Many users rushed to withdraw funds, triggering what became DeFi’s first major bank run, spreading beyond ETH to stablecoins like USDC and USDT. Liquidity crunches and 100% utilization across markets, leaving many users unable to withdraw assets. 

All is not lost, however. 

Within weeks, major players came together to mobilise hundreds of millions in recovery capital for affected users in both instances. Tether pledged $127.5M to support the Drift protocol’s Recovery Plan, while the DeFi United initiative (led by Aave, Lido, and Ether.fi)  raised well over $300M to help mitigate the consequences of the rsETH incident.

The lessons from April are indeed hard to ignore, as the risks are real and increasingly sophisticated. But, as we’ve seen so far, so is the industry’s ability to rebuild. And ideally, these cases will prompt other DeFi projects to check their entire setups for any possible vulnerabilities that might cause harm to users, and the ecosystem, in the future.

DeFi Saver news & updates

Now, as the rsETH incident unfolded, we certainly did not stay on the sidelines. 

So, let’s go over everything new and currently live on DeFi Saver.

Repay & Collateral Switch for aWETH management

Since swapping the underlying asset was impossible, 1inch and Fluid were the first to create a solution for this to be done by swapping aTokens directly. 

This is exactly what enabled us to adapt our DFS tools so that users can manage and get out of previously stuck Aave positions. That includes Collateral switch and Repay for unwinding their ETH positions or clearing the debt.

The situation is being resolved as we speak, but there are still things you can do to additionally protect your funds. We’ve already covered all of the possible solutions for WETH management in one of our previous blog posts, so be sure to give it a read.

Little big updates & what’s coming soon

Some of the smaller, but equally important updates for April also include the addition of the Aave V4 dedicated DFS History dashboard (giving users a clearer and more structured view of their past actions and position changes), as well as the integration of PT-USDG tokens to the Aave V3 Core market.

In terms of things we have in the works, we are super happy to announce we’re bringing perpetuals and advanced hedging opportunities to DeFi Saver! And very soon, indeed, so make sure to follow our socials not to miss some exciting opportunities coming your way.

DeFi Saver stats

At the end of April, DeFi Saver Automation managed around $345M of collateralized assets across 880 user positions. The total number of transactions for April is around 9.519, with the number of total unique addresses (presumably the number of users) executing them being 1.488.

And in relation to the rsETH hack, our Repay and Collateral Switch tools were successfully utilised 88 times on Mainnet, 16 on Arbitrum, and 15 on Base, in total for managing ETH positions on Aave.

Position of the month

For this month’s issue, we’ll be looking at a hefty and mildly risky, weETH/ETH leveraged staking position in Aave’s Core market.

As you may recall, ETH transfers were frozen from April 18 up until April 20. During that window, this position may not have faced the same immediate risk as others, thanks to the typically tight peg between weETH and ETH.

That said, in positions like these, there is depeg risk, especially during market stress, when users rush to withdraw their funds, especially with utilisation at 100%. However, with this user using weETH, which uses an in-contract rate, the issue here is not the peg, but the high borrowing rate.

This means there is no immediate risk of liquidation, but if we consider the possibility of the borrowing rate for ETH on Aave Core rising in the next period, gradually paying off this debt would be one option. Especially given that the borrow APY for ETH currently is 4.43% compared to the 2.50% supply APY for weETH.

And from what we can see in the user’s History tab, that seems to be exactly the case:

Now, if they were to explore other options on DeFi Saver, they could use the DFS Loan Shifting tool to migrate to a protocol offering better rates, particularly in times of uncertainty, such as this one. 

Checking alternatives is straightforward: Go to the Discover tab and input your assets, and you’ll get a clear overview of the best available options. At the moment, Spark seems to be a strong candidate for Mainnet users:

Hopefully, the rsETH case is the last slipping stone of this quarter, and with this, we look forward to seeing you next month, as we’ll have much exciting to share with you all. 

Until the next post and the next big DFS update coming your way, stay safe out there!

Stay connected:

🌍: DeFiSaver.com

💬: Official Discord

📢: Official Twitter/X