The recent $292 million exploit of KelpDAO has sent shockwaves through the decentralized finance (DeFi) sector, revealing critical vulnerabilities in its infrastructure. The attack, which occurred over the weekend, targeted Kelp's rsETH token, a yield-bearing version of ether (ETH), and exploited a flaw in the LayerZero bridge component that facilitates asset transfers across blockchains. By manipulating this system, the attacker created unbacked tokens and used them as collateral to drain real assets from lending markets, particularly from Aave. Following the incident, Aave saw a staggering $6 billion drop in assets as users rushed to withdraw their funds, raising fears of a potential 'bank run' scenario. This exploit comes shortly after another significant hack of $285 million involving the Solana-based Drift protocol, further denting investor confidence in the nearly $90 billion crypto sector. Experts warn that the interconnected nature of DeFi protocols means that a single failure can have widespread repercussions, and many are calling for better risk management and security practices. Despite the turmoil, some believe that the DeFi sector can learn from these incidents and emerge stronger.