- Ink, the Kraken-incubated OP Stack L2, has seen its overall price close by nearly 33% in the past week.
- The decline begins on April 18 KelpDAO rsETH, which left about $195 million in bad debt in the lending markets.
- rsETH’s ink exposure through its Tydro trading platform facilitated the exit.
Ink has shown a decline in lock prices of about 33% over the past week and 34% to 35% over the past month, according to DefiLlama chain layout.
The decline has been remarkable not because the Ink itself was stolen directly but because of the rental of the equipment that is most affected. rsETH.
rsETH is a token to re-water the center of the April 18 KelpDAO. The fallout from the event spread across several chains and Ink was one of the most affected due to its design of the DeFi ecosystem.
How the KelpDAO Exploit Affected Ink
On April 18th, KelpDAO’s LayerZero-based bridge to its rsETH liquid restaking token was misused through a change in DVN’s single proof.
The attacker used this vulnerability to create 116,500 unstable rETH tokens with a value of $292 million to $293 million on Ethereum.
These unclaimed tokens were used as collateral in lending markets, most notably Aave, draining the wrapped ETH and leaving around $195 million in bad debt.
Emergency shutdowns and risk management were initiated on several protocols and chains in the following hours.
Ink was placed alongside Mantle, Plasma, and Hyperliquid L1 as one of the most prominent chains in the fall. The disclosure of the incident made it clear that TVL drops on these networks were driven by quick removal rather than cheapness.
Ink Exposure Through Tydro Made Drawdown Stronger
Ink is a Kraken-incubated OP Stack Layer 2 that has grown its TVL from $1 million to nearly $450 million by early 2026.
A large part of this growth was driven by the lending and recycling of flows that settled at Tydro, the deployment of the Aave v3 white label that serves as one of Ink’s first DeFi products.
At the time of the project, about $21 million of rsETH on Ink was posted as collateral for $19.36 million in ETH debt.
The position was concentrated in only two wallets with a lot of power, which makes the show very difficult for any doubts about supporting rsETH.
As it became known, Tydro suspended its rsETH markets on Ink and started contacting the Ink Foundation for a fix.
The Aave transaction report shared that Tydro’s Ink could face between $0.9 million and approximately $10 million in bad debt.
Why Ink’s TVL Base Was At Extreme Risk
Ink’s role in the chain’s ranking makes TVL much lower than it would be in a large, stable network.
As a new and smaller chain relative to others such as Arbitrum or Base, a large part of Ink’s TVL is tied to DeFi startups, especially Tydro, resale, and agricultural operations around the expected INK token.
The main share of Ink capital was short-term and encouraging before the project. This type of liquidity is the first to emerge from the risk environment.
Both Tydro and multiple environmental reports confirm that no fraud occurred on Ink itself. Success was achieved in the KelpDAO cross-bridge and rsETH minting process.
The ink took its effect through collateral damage rather than direct attack on its architecture.
