Aave’s DeFi United Recovery Effort Reaches $238 million As Crypto Rallies to Bail Out Its Biggest Lender

Mantle and Aave DAO together contributed 55,000 ETH, or $127 million, as the DeFi United effort to cover bad debt from the $292 million KelpDAO gains momentum.

Aave’s industry-wide recovery effort to improve the backing of rsETH following the KelpDAO exploit has raised approximately $238 million, according to the effort’s live contribution page as of last check.

Mantle and AAVE DAO, who together raised 55,000 ETH or $127 million are among the largest contributors. The recovery initiative, called DeFi United and led by Aave service providers, was launched last week after the April 18 exploit left Aave holding 116,500 unbacked rsETH tokens that an attacker had used as collateral to borrow roughly $190 million in ETH and other assets. Aave founder Stani Kulechov personally pledged 5,000 ETH, currently worth approximately $11.7 million. Other contributors include EtherFi, Ethena, LayerZero, and Ink Foundation. The effort’s goal is to restore full backing for rsETH and prevent the shortfall from being socialized across Aave’s depositor base as permanent bad debt.

This story is an excerpt from the Unchained Daily newsletter.

Aave, KelpDAO and LayerZero have also submitted a proposal on Arbitrum’s governance forum asking the network to release the 30,766 ETH, worth approximately $71 million, that Arbitrum’s Security Council froze from the attacker’s address shortly after the exploit.

The KelpDAO exploit has been attributed by LayerZero to North Korea’s Lazarus Group, which exploited a single-verifier bridge configuration that LayerZero said it had repeatedly advised against.