- The Kelp DAO protocol has completed a five-week recovery of its restaked Ether (rsETH) token following a $293 million hack attributed to North Korea‘s Lazarus Group in April.
- The exploit triggered a major liquidity crisis on the Aave lending platform, creating $190 million in bad debt and causing its total value locked (TVL) to plummet from $26.4 billion to under $14 billion.
- Multiple crypto protocols banded together under the DeFi United initiative to supply funds and restore the backing for the rsETH tokens.
- Aave’s massive net outflows have slowed, but its TVL has shown no significant recovery more than a month after the incident.
The Kelp DAO liquid staking protocol announced on Monday that its restaked Ether token is finally restored after a five-week effort to recover from a devastating $293 million exploit by North Korea’s Lazarus Group on April 18. The final tranche of over 20,000 rsETH tokens was sent to its cross-chain contract, closing the operational recovery plan.
Consequently, the April hack sent shockwaves through the broader crypto lending market, disrupting billions in liquidity. The attacker used a large portion of the stolen 116,500 rsETH as collateral on Aave to borrow other assets, leaving $190 million in bad debt and sparking massive withdrawals. This incident was one of 25 crypto hacks in April, which combined for $630 million in losses.
However, the recovery was enabled by contributions from several crypto protocols under the DeFi United initiative. Kelp DAO reopened bridging on May 13 and resumed normal rsETH mints, redemptions, and rewards operations the following day.
Meanwhile, Aave has struggled to regain its footing after the collateral damage. The protocol’s total value locked (TVL) collapsed from $26.4 billion to below $14 billion, losing its top spot in DeFi. Data shows net outflows have since eased, but its TVL has shown no signs of recovery, remaining between $13.9 billion and $15.1 billion for weeks.
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