Arbitrum DAO Opens Vote to Release 30,766 Frozen ETH Into DeFi United Recovery Fund

The Arbitrum DAO began voting Thursday on whether to release 30,766 ETH — worth approximately $71 million — from a governance-controlled wallet into the DeFi United recovery initiative. In the first hour, 16.9 million ARB tokens were cast in favor with zero opposing votes. The voting ends on May 7.

The proposal was submitted by Aave, Kelp DAO, and LayerZero. If it passes, the Arbitrum DAO would become the largest single contributor to DeFi United — the coalition assembled after the April 18 $292 million Kelp DAO exploit to restore rsETH’s backing and close bad debt across DeFi’s largest lending protocols.

This story is an excerpt from the Unchained Daily newsletter.

As Unchained reported, the Arbitrum Security Council froze the ETH on April 20 after the Kelp attacker moved stolen funds to an Arbitrum One address. Nine of the council’s 12 members voted to execute the emergency action, citing input from law enforcement. The funds were moved to a governance-controlled address and can only be released through a formal DAO vote.

The frozen 30,766 ETH represents roughly a quarter of the total stolen. The exploit, attributed with preliminary confidence to North Korea’s Lazarus Group, saw attackers forge a cross-chain message through Kelp’s single-verifier LayerZero bridge, minting 116,500 unbacked rsETH tokens and depositing them into Aave V3 as collateral to borrow roughly $190 million in real assets.

As Unchained reported, DeFi United has drawn pledges totaling more than $311 million, including a 30,000 ETH commitment from Consensys and founder Joseph Lubin, a 30,000 ETH loan from Mantle, and a 5,000 ETH personal contribution from Stani Kulechov. A separate Aave DAO vote to contribute 25,000 ETH from its treasury is also pending.

The Security Council’s original freeze prompted debate about centralization. Critics raised concerns about a permissionless network intervening in funds held by an external address. Supporters argued the circumstances — a state-sponsored hack against DeFi infrastructure — justified the action. The DAO vote now shifts that decision to ARB token holders.