Gate News message, April 24 — Lido Labs is seeking DAO approval to allocate up to 2,500 staked Ethereum (stETH), worth approximately $5.8 million, to help close the rsETH deficit caused by the Kelp DAO LayerZero exploit announced last week.
The Kelp exploit resulted in a roughly $292 million loss and created a material rsETH backing shortfall exceeding 100,000 ETH. The impact has rippled across DeFi venues, triggering market pressure, elevated borrow and lending stress, and forced liquidation risks for users in vaults and looping strategies. Aave’s total value locked (TVL) fell by nearly $8 billion after attackers used stolen Kelp-linked assets as collateral, leaving approximately $195 million in bad debt.
Lido emphasized that its 2,500 stETH contribution would only be deployed as part of a fully funded recovery package to close the rsETH deficit in full. The EtherFi Foundation has proposed contributing 5,000 ETH, and Aave founder and CEO Stani Kulechov announced a personal donation of 5,000 ETH to Aave’s DeFi United relief fund. Lido Labs expects multiple crypto projects to participate in the coordinated relief effort.
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