The $292 million exploit of Kelp DAO has set off a wave of reactions across the crypto industry, with developers and traders warning that the incident exposed deeper flaws in how decentralized finance (DeFi) is built.

Data shared by market participants shows the immediate fallout spread far beyond the hacked protocol.

“The rsETH hack is leading to withdrawals across all lending protocols, even on solana and unaffected protocols,” 0xngmi said in one post on Sunday, pointing to steep outflows including “Aave: -6,200m (-23%) net inflows” and smaller but notable declines across Morpho, Sky and JupLend. rsETH is liquid restaking protocol Kelp DAO’s restaked ether and is a Liquid Restaking Token (LRT) that allows users to earn ether…