KelpDAO Breach Spurs $892M Outflow; USDT Strengthens

Between April 19 and April 26, a breach at KelpDAO coincided with $892.8 million of outflows from the stablecoin sector and a sharp contraction in decentralized finance total value locked. Tether’s USDT increased to $189.78 billion, representing 59.19% of the $320.65 billion stablecoin market.

The breach prompted heavy withdrawals across DeFi as users unwound positions and converted holdings into stablecoins or cash equivalents. Large-scale position closures occurred on protocols such as Aave, contributing to the rapid decline in aggregated DeFi balances over the seven-day period.

Tether added roughly $2.89 billion during the week, lifting USDT to a $189.78 billion market cap. Circle’s USDC fell 1.01% to $77.79 billion, a decline of about $794 million. Sky’s rebranded USDS slipped 1.89% to $8.27 billion, a drop near $159 million. Maker-origin DAI rose 1.55% to $4.67 billion, while World Liberty Financial’s USD1 increased 4.34% to $4.39 billion, the largest weekly gain among the top issuers.

Several other large stablecoins recorded bigger percentage declines. Ethena’s USDe fell 34.39% to $3.82 billion, losing just over $2 billion. PayPal’s PYUSD contracted 16.06% to $3.445 billion. USDG declined 5.71% to $1.114 billion, and FDUSD moved down 1.46% to $2.34 billion. FRAX and GUSD also showed seven-day decreases in supply or market value.

After the outflows, the sector total settled at $320.65 billion. Seven-day metrics indicate capital shifted toward larger, established issuers while smaller or newer products experienced larger percentage contractions.

The figures reflect seven-day changes ending April 26. Market flows during the period concentrated in the largest issuer and coincided with reduced exposure to protocols perceived as vulnerable.