Gate News message, April 26 — Aave service providers proposed on Friday (April 25) a governance vote to contribute 25,000 ETH, valued at approximately $58 million, from the protocol’s DAO to DeFi United, a coordinated relief effort to restore backing for rsETH following last week’s Kelp DAO exploit.
The Kelp DAO incident saw an attacker exploit a compromised LayerZero bridge to mint unbacked rsETH, which was then used as collateral on Aave to borrow real assets, leaving the protocol with significant bad debt. Aave’s proposed contribution aims to close the remaining shortfall. Separately on Friday, Mantle proposed a low-interest credit facility of up to 30,000 ETH to help Aave absorb any remaining bad debt.
Other ecosystem protocols are also contributing: Lido DAO and Ether.fi proposed 2,500 ETH and 5,000 ETH respectively on Thursday (April 24). Aave’s Senior VP of Engineering, Emilio Frangella, committed 500 ETH personally, while founder and CEO Stani Kulechov contributed 5,000 ETH. Including contributions from Golem, BGD Labs, and individual users, the DeFi United fund now stands at approximately 69,534 ETH, or roughly $161 million.
DeFi total value locked has declined to just above $80 billion, down over 27% from $110 billion at the start of the year. JPMorgan analysts noted that repeated exploits are weighing on institutional interest in DeFi, prompting users to shift funds into stablecoins.
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