- Aave founder Stani Kulechov pledged 5,000 ETH personally to the “DeFi United” recovery effort.
- The coordinated relief push aims to absorb bad debt from the April 18 KelpDAO exploit that drained $292 million.
- Mantle has proposed a credit facility of up to 30,000 ETH, while Lido, Ether.fi, and others have confirmed participation.
- The KelpDAO exploit, attributed to North Korean Hackers, resulted in a significant liquidity crunch for Aave.
Aave and a coalition of DeFi protocols are mounting a coordinated recovery effort, dubbed “DeFi United,” to absorb bad debt caused by a $292 million exploit on KelpDAO’s bridge on April 18. The initiative, launched on Wednesday, involves major industry players committing substantial resources to address a shortfall estimated between $123.7 million and $230.1 million.
Aave founder Stani Kulechov personally pledged 5,000 ETH, stating, “Aave is my life’s work and we’re working nonstop to find the best possible outcome for users.” Meanwhile, Mantle core team drafted a proposal for a credit facility of up to 30,000 ETH to Aave DAO.
Bybit co-founder Ben Zhou stated the exchange will support the Mantle proposal, noting, “When we got hacked the industry got together and helped us.” Consequently, contributors from Lido Finance proposed a one-time contribution of up to 2,500 stETH.
Golem entities announced a combined 1,000 ETH contribution. Ether.fi has proposed a governance vote to deploy 5,000 ETH from its treasury. Other protocols like Tydro, Ethena, and Frax Finance also signaled support.
The exploit saw attackers mint 116,500 rsETH via a vulnerability in Kelp’s LayerZero bridge. They then used these unbacked tokens as collateral on Aave to borrow roughly $190 million, triggering over $10 billion in net withdrawals. However, the Arbitrum Security Council later froze $71.5 million linked to the exploiter.
Industry experts offered cautious analysis. Matthew Pinnock of Altura DeFi told Decrypt the effort signals a move toward a “more coordinated financial system.” Georgii Verbitskii of TYMIO noted, however, that “there are still very few concrete details about the initiative.”
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