DefiLlama Chain Rankings Highlight Ink’s 33% TVL Drop: What’s Behind the Drop?

• Ink, the Kraken-incubated OP Stack L2, has seen its total value locked fall approximately 33% over the past week.
• The drop traces back to the April 18 KelpDAO rsETH exploit, which left roughly $195 million in bad debt across lending markets.
• Ink’s concentrated rsETH exposure through its Tydro lending markets accelerated the outflows.

Ink has recorded a total value locked drop of approximately 33% over the past week and 34% to 35% over the past month, according to DefiLlama chain rankings.

The drop has drawn attention not because Ink itself was directly hacked but because its lending infrastructure carried concentrated exposure to rsETH.

rsETH is a liquid restaking token at the center of the April 18 KelpDAO exploit. The fallout from that incident spread across multiple chains and Ink was among the most affected due to the structure of its DeFi ecosystem.

How the KelpDAO Exploit Affected Ink

On April 18, KelpDAO’s LayerZero-based bridge for its rsETH liquid restaking token was exploited through a compromised single-verifier DVN configuration.

The attacker used this vulnerability to mint 116,500 unbacked rsETH tokens with a value of approximately $292 million to $293 million on Ethereum.

These unbacked tokens were then used as collateral across lending markets, most notably Aave, draining wrapped ETH and leaving roughly $195 million in bad debt.

Emergency pauses and risk controls were activated across multiple protocols and chains in the hours that followed.

Ink was grouped alongside Mantle, Plasma, and Hyperliquid L1 as one of the chains most exposed to the fallout. Coverage of the incident explicitly noted that the TVL drops on these networks were driven by active withdrawals rather than token price declines.

Ink’s Exposure Through Tydro Made the Drawdown Sharper

Ink is a Kraken-incubated OP Stack Layer 2 that had grown its TVL from single-digit millions to nearly $450 million by early 2026.

A major portion of that growth was driven by lending and restaking flows concentrated in Tydro, an Aave v3 white-label deployment that serves as one of Ink’s primary DeFi primitives.

At the time of the exploit, approximately $21 million of rsETH on Ink was posted as collateral against roughly $19.36 million in wrapped ETH debt.

That position was concentrated in just two highly leveraged wallets, making the exposure particularly sensitive to any uncertainty around rsETH’s backing.

Once the exploit became clear, Tydro froze its rsETH markets on Ink and began coordinating with the Ink Foundation on a remediation plan.

Aave’s incident report shared scenarios in which Tydro’s Ink deployment could face between approximately $0.9 million and nearly $10 million in bad debt,.

Why Ink’s TVL Base Was Particularly Vulnerable to a Risk-Off Event

Ink’s position in the chain rankings makes the TVL decline more severe than it might have been for a larger, more established network.

As a newer and smaller chain relative to others like Arbitrum or Base, a large portion of Ink’s TVL was tied to a narrow set of DeFi primitives, primarily Tydro, restaking products, and liquidity farming activity around the anticipated INK token.

A meaningful share of Ink’s capital was short-term and incentive-driven before the exploit occurred. This type of liquidity is the first to exit during a risk-off environment.

Both Tydro and broader ecosystem reporting confirm that no fraudulent transactions happened on Ink itself. The exploit took place on KelpDAO’s cross-chain bridge and rsETH minting pathway.

Ink absorbed the consequences through contaminated collateral rather than a direct attack on its own infrastructure.