DeFi Rescue Hurts Anti-Wall Street Pitch After $10 Billion Run

Decentralized finance is in the midst of the largest coordinated rescue in its history, an effort marked by moral hazard concerns and ad-hoc negotiations that sit awkwardly with the sector’s founding pitch as a disruptor of traditional finance.

A week after a security breach at a small crypto protocol called KelpDAO triggered a $10 billion run on Aave, the largest DeFi lending protocol, the platform’s founder and a coalition of allied crypto projects are working to restore liquidity. Their goal is to let users withdraw funds and unwind positions.