DeFi United Releases Technical Plan to Restore rsETH Backing After $292 Million Kelp DAO Exploit

DeFi United, the multi-protocol coalition assembled after the April 18 Kelp DAO bridge exploit, has published a detailed technical recovery plan to restore full backing for rsETH and unwind the attacker’s residual positions across Aave and Compound.

The plan operates on two tracks. Committed ETH from ecosystem contributors will be converted into rsETH in staged tranches and deposited into Kelp DAO’s bridge lockbox contract — identified as the RSETH_OFTAdapter — to restore the token’s full backing at its current Kelp exchange ratio of 1.07 ETH per rsETH. In parallel, a governance-approved liquidation sequence will recover an estimated 13,000 ETH from eight affected Aave V3 positions across Ethereum and Arbitrum, and roughly 16,776 ETH from Compound. Recovered rsETH will be transferred to a DeFi United multisig, redeemed through Kelp’s standard redemption process, and used to clear the remaining deficit.

This story is an excerpt from the Unchained Daily newsletter.

Both LayerZero and Kelp have implemented new security measures ahead of the bridge restart, though the coalition chose a staged deposit approach over a single lump sum to validate those measures in a live production environment before committing the full balance.

Total disclosed pledges have surpassed $300 million, including a 30,000 ETH commitment from Consensys and founder Joe Lubin, a pending 25,000 ETH Aave DAO treasury proposal, and prior contributions from Mantle (30,000 ETH), Stani Kulechov (5,000 ETH personally), EtherFi, Ethena, LayerZero, and others. As Unchained reported last week, the Arbitrum Security Council had already frozen 30,766 ETH worth roughly $71 million tied to the exploiter’s address, funds that Aave, Kelp, and LayerZero have since proposed releasing into the recovery effort via Arbitrum governance.

The April 18 exploit, attributed with preliminary confidence to North Korea’s Lazarus Group, saw an attacker forge a cross-chain message through Kelp’s single-verifier LayerZero bridge configuration, minting 116,500 unbacked rsETH worth $292 million and using them as collateral on Aave V3 to borrow roughly $190 million in wrapped ETH and wstETH. The maneuver left Aave exposed to severely impaired collateral, triggered a $10 billion TVL decline.