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Aave Leads $101 Million DeFi Rescue To Restore rsETH Backing After KelpDAO Hack

The effort seeks to recapitalize underbacked rsETH to prevent bad debt across lending markets.

Overview

  • The KelpDAO bridge hack on April 18 let the attacker mint 116,500 unbacked rsETH and borrow about $190 million, leaving a backing gap above 112,000 rsETH.
  • Aave’s “DeFi United” response has lined up more than 43,500 ETH in commitments, including Lido’s proposed 2,500 stETH, EtherFi’s 5,000 ETH, and a 5,000 ETH pledge from Aave founder Stani Kulechov.
  • Aave paused rsETH markets across Ethereum, Arbitrum, Base, Mantle, and Linea to contain risk while the relief vehicle focuses on restoring rsETH’s 1:1 backing with ETH.
  • Arbitrum’s security council froze about 30,766 ETH tied to the exploit, yet on‑chain analysts say roughly 75,700 ETH was moved through Thorchain into bitcoin, which makes clawbacks unlikely.
  • Lido said its EarnETH vault has about 9% rsETH exposure and paused activity, set up $3 million in first‑loss protection, and warned users that exits could face haircuts if recovery drags, as JPMorgan flagged broad TVL outflows and a shift into USDT.