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Aave to Tighten Collateral Standards Following Near-Disaster KelpDAO Crisis

Aave Labs's Chief Legal and Policy Officer committed to reform earlier today at the Consensus Miami 2026 conference.
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May 7, 2026 • 1 min read

Aave Labs wants to fundamentally reform how it assesses and lists collateral assets following the near-catastrophic KelpDAO exploit earlier this month that blew a multi-hundred-million-dollar hole in its namesake lending market.

What's the Scoop?

  • Risk Review: At the Consensus Miami 2026 conference earlier today, Aave Labs Chief Legal and Policy Officer Linda Jeng committed to fundamentally overhaul how Aave evaluates collateral assets on its lending markets by adding cybersecurity, interoperability, and technical architecture reviews alongside traditional volatility and liquidity assessments. Jeng also announced that Aave will publish minimum standards for asset listings.
  • Kelp Catalyst: The changes follow last month's KelpDAO hack, which the exploit of Kelp DAO’s LayerZero-powered bridge and enabled an attacker to illicitly mint 116.5k rsETH (89k of which was supplied to Aave and used to borrow nearly $200M worth of WETH and wstETH).
Aave rewrites the rulebook for asset listings after $293 million exploit
The lending giant is expanding its asset listing criteria beyond financial risk to include cybersecurity and architecture, and wants the rest of DeFi to follow.
CoinDeskOliver Knight

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