Aave Proposes 25,000 ETH Contribution to DeFi United for Kelp DAO Exploit Recovery

Gate News message, April 24 — Aave service providers proposed a governance contribution of 25,000 ETH, worth approximately $58 million, from the protocol's DAO to DeFi United on Friday to help restore backing for rsETH following last week's Kelp DAO exploit. The attack compromised a LayerZero bridge, allowing an attacker to mint unbacked rsETH and use it as collateral on Aave to borrow real assets, leaving the protocol with significant bad debt.

Aave's contribution joins ecosystem-wide relief efforts. Lido DAO and Ether.fi proposed contributions of 2,500 ETH and 5,000 ETH respectively on Thursday. Aave Senior VP of Engineering Emilio Frangella committed 500 ETH personally, while founder and CEO Stani Kulechov contributed 5,000 ETH. Mantle separately proposed a low-interest credit facility of up to 30,000 ETH to help Aave absorb remaining bad debt. Including contributions from Golem, BGD Labs, and individual users, the DeFi United fund totals approximately 69,534 ETH, or nearly $161 million.

With roughly 30,700 ETH frozen on Arbitrum following the attack, analyst DCF GOD estimates the hole has been filled assuming all proposals pass. DeFi protocol TVL now sits just above $80 billion, down over 27% from $110 billion at the start of 2026. JPMorgan analysts noted that repeated exploits are weighing on institutional interest in DeFi and driving users toward stablecoins.