Ethereum stablecoin and tokenized fund market cap drops 19% to $168B
The Ethereum ecosystem has experienced a 19% contraction in its stablecoin and tokenized fund market, falling from $206.7 billion in April 2026 to approximately $168 billion by November 2026. This decline was triggered by an April 18, 2026, exploit of KelpDAO, where attackers compromised a LayerZero decentralized verifier node to mint $292 million in unbacked rsETH. The incident caused immediate liquidity crises across major lending protocols like Aave and triggered an industry-wide drop in total value locked of up to $14 billion. As the cash layer of decentralized finance, this reduction in stablecoin and tokenized fund supply limits the capital available for broader DeFi activity. Evercrest Technologies, the parent company of KelpDAO, has initiated legal action against LayerZero Labs, alleging negligence regarding security and disclosure protocols. LayerZero has countered by attributing the breach to the North Korean Lazarus Group, highlighting ongoing vulnerabilities in cross-chain bridge infrastructure. This event serves as a significant stress test for the RWA and stablecoin sector, signaling a shift in investor risk appetite and a cautious outlook for liquidity recovery on Ethereum.