Lending protocol Kava Lend attacked, approximately 55.2 million KAVA borrowed

Kava Lend, the lending protocol on the Kava chain, was exploited on November 15 when an attacker borrowed roughly 55.2 million KAVA tokens, worth about $3.76 million at pre-attack prices, by inflating the value of deposits in an idle BUSD market by approximately 243,000x and using the inflated collateral to take out repeated KAVA loans. About 49.2 million KAVA was then bridged to BNB Chain via LayerZero, with most of it sold for roughly $2.09 million in BNB and USDT. Kava said the incident was not an infinite mint and that the impact was confined to Kava Lend, while partner exchanges halted KAVA deposits and withdrawals and the team paused the Axelar bridge. The event matters because it shows how a dormant market's pricing mechanism can be gamed to drain a lending pool, and traders will watch whether KAVA deposits and withdrawals reopen and how the protocol covers the shortfall.