The decentralized finance (DeFi) sector is experiencing significant pressure following a recent bad debt event, with notable declines in several key assets. According to NS3.AI, AAVE and LayerZero's ZRO each fell by 22% in a short period. Other DeFi tokens also faced downturns, with Lido's LDO dropping 19%, Ethena's ENA sliding 13%, and Compound's COMP losing 10%. In contrast, Ethereum (ETH) remained stable during this time. Santiment, a market analysis firm, indicated that these movements reflect sector-specific challenges rather than a widespread selloff of Ethereum.