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24 Apr 2026, 01:32
Aave Leads DeFi United to Restore rsETH Backing After KelpDAO Exploit
Aave launched the “DeFi United” initiative with multiple crypto firms to address a $292 million loss caused by the KelpDAO exploit and stabilize rsETH backing. The attack used a LayerZero vulnerability to mint uncollateralized rsETH, triggering a liquidity crisis on Aave and a sharp $10 billion drop in total value locked. Major players like EtherFi, Golem Foundation, and Mantle are contributing funds and support to prevent bad debt and restore stability across the crypto lending ecosystem. Aave has stepped in with a coordinated industry effort to contain the fallout from the KelpDAO exploit. To address this, Aave and several partners have launched a recovery initiative called “DeFi United.” Aave’s ‘Defi United’ Sees Industry Support The situation has pushed multiple crypto firms and foundations to come together and prevent further damage. Lido Finance, EtherFi, and Aave founder Stani Kulechov have already proposed funding measures. At the same time, Arbitrum has frozen a portion of the stolen funds. However, a large share of the assets has already been moved through THORChain, making recovery harder. The current priority is to close the funding gap created by the exploit. Teams across the ecosystem are working to stabilize rsETH backing and avoid bad debt across lending platforms. Tydro and the Ink Foundation have joined the effort with Aave and other contributors. Their role is to support affected users and help maintain order in the lending markets. Golem Foundation and Golem Factory have also stepped in with financial support. They are contributing a combined 1,000 ETH from their treasuries to strengthen the recovery plan. EtherFi is playing a key role as well. Its team has been working closely with Aave and other stakeholders to address the shortfall linked to rsETH. Another one. @golemproject and @golemfoundation have made a 1,000 ETH contribution to the ongoing rsETH relief effort. We appreciate their willingness to participate and help users. DeFi United. https://t.co/9PigltCePg — Aave (@aave) April 23, 2026 The EtherFi Foundation has proposed giving 5,000 ETH to a dedicated relief vehicle. The fund relief is meant to shield people and limit the growth of bad debt in the crypto world. It is noted by the foundation that the issue would require a concerted industry response to manage. LayerZero has also acknowledged it and committed to recovery. The team said, “As part of an industry-wide recovery initiative, LayerZero’s proposed contribution would go towards the best path forward to restoring rsETH backing. We have been closely coordinating with Aave and all other parties like EtherFi, Ethena, Arbitrum, and Kelp who have been working tirelessly to ensure the best possible outcome for crypto.” Aave’s founder and CEO, Stani Kulechov, has personally committed funds to support the initiative. He wrote , “ Aave is my life’s work and we’re working nonstop to find the best possible outcome for users. I’m personally contributing 5000 ETH to DeFi United as we continue working together with partners on formalizing more commitments. I’m working to see this resolved and market conditions normalized as soon as possible. DeFi United.” In another development, Mantle has proposed a large loan to support Aave. During a governance discussion backed by the crypto exchange Bybit, Mantle suggested offering a 30,000 ETH loan. This would serve as a defensive mechanism against default risks created by the exploit. As it is typical for the field to rely on one another when under pressure, the move illustrates a pattern of mutual support. Aave has then acted immediately to mitigate further risks. It paused rsETH reserves across several networks, including Ethereum Core, Arbitrum, Base, Mantle, and Linea. This pause is to protect the system as it is being restored. The KelpDAO incident had led to an estimated loss of approx $292 million and raised concerns about general instability across the crypto lending ecosystem. The attacker was able to mint uncollateralized rsETH and use it to borrow nearly $190 million in assets on Aave. This disrupted the balance of collateral on the platform. As a result, panic spread among users, triggering heavy withdrawals. The total value locked on Aave dropped sharply by nearly $10 billion at one point.
24 Apr 2026, 01:32
Aave Leads DeFi United to Restore rsETH Backing After KelpdDAO Exploit
Aave launched the “DeFi United” initiative with multiple crypto firms to address a $292 million loss caused by the KelpDAO exploit and stabilize rsETH backing. The attack used a LayerZero vulnerability to mint uncollateralized rsETH, triggering a liquidity crisis on Aave and a sharp $10 billion drop in total value locked. Major players like EtherFi, Golem Foundation, and Mantle are contributing funds and support to prevent bad debt and restore stability across the crypto lending ecosystem. Aave has stepped in with a coordinated industry effort to contain the fallout from the KelpDAO exploit. To address this, Aave and several partners have launched a recovery initiative called “DeFi United.” Aave’s ‘Defi United’ Sees Industry Support The situation has pushed multiple crypto firms and foundations to come together and prevent further damage. Lido Finance, EtherFi, and Aave founder Stani Kulechov have already proposed funding measures. At the same time, Arbitrum has frozen a portion of the stolen funds. However, a large share of the assets has already been moved through THORChain, making recovery harder. The current priority is to close the funding gap created by the exploit. Teams across the ecosystem are working to stabilize rsETH backing and avoid bad debt across lending platforms. Tydro and the Ink Foundation have joined the effort with Aave and other contributors. Their role is to support affected users and help maintain order in the lending markets. Golem Foundation and Golem Factory have also stepped in with financial support. They are contributing a combined 1,000 ETH from their treasuries to strengthen the recovery plan. EtherFi is playing a key role as well. Its team has been working closely with Aave and other stakeholders to address the shortfall linked to rsETH. Another one. @golemproject and @golemfoundation have made a 1,000 ETH contribution to the ongoing rsETH relief effort. We appreciate their willingness to participate and help users. DeFi United. https://t.co/9PigltCePg — Aave (@aave) April 23, 2026 The EtherFi Foundation has proposed giving 5,000 ETH to a dedicated relief vehicle. The fund relief is meant to shield people and limit the growth of bad debt in the crypto world. It is noted by the foundation that the issue would require a concerted industry response to manage. LayerZero has also acknowledged it and committed to recovery. The team said, “As part of an industry-wide recovery initiative, LayerZero’s proposed contribution would go towards the best path forward to restoring rsETH backing. We have been closely coordinating with Aave and all other parties like EtherFi, Ethena, Arbitrum, and Kelp who have been working tirelessly to ensure the best possible outcome for crypto.” Aave’s founder and CEO, Stani Kulechov, has personally committed funds to support the initiative. He wrote , “ Aave is my life’s work and we’re working nonstop to find the best possible outcome for users. I’m personally contributing 5000 ETH to DeFi United as we continue working together with partners on formalizing more commitments. I’m working to see this resolved and market conditions normalized as soon as possible. DeFi United.” In another development, Mantle has proposed a large loan to support Aave. During a governance discussion backed by the crypto exchange Bybit, Mantle suggested offering a 30,000 ETH loan. This would serve as a defensive mechanism against default risks created by the exploit. As it is typical for the field to rely on one another when under pressure, the move illustrates a pattern of mutual support. Aave has then acted immediately to mitigate further risks. It paused rsETH reserves across several networks, including Ethereum Core, Arbitrum, Base, Mantle, and Linea. This pause is to protect the system as it is being restored. The KelpDAO incident had led to an estimated loss of approx $292 million and raised concerns about general instability across the crypto lending ecosystem. The attacker was able to mint uncollateralized rsETH and use it to borrow nearly $190 million in assets on Aave. This disrupted the balance of collateral on the platform. As a result, panic spread among users, triggering heavy withdrawals. The total value locked on Aave dropped sharply by nearly $10 billion at one point.
23 Apr 2026, 22:37
Arbitrum Price Nears Key Support at $0.121 After 3% Drop
On April 23, the Arbitrum (ARB) price dropped by around 3% on a daily chart, pushing its value down to $0.1270 following turmoil in the DeFi sector due to the Kelp DAO hack. Earlier, the Arbitrum Security Council had achieved success in freezing 30,766 Ethereum tokens that were linked to the hack. The price is currently revolving around an important low of $0.121, and if it falls below this level, it could lead to a new low. On April 23, the Arbitrum (ARB) price witnessed a drop of around 3.26% in the last 24 hours, declining its value from $0.1319 to $0.1270. At the time of writing, the ARB price is trading at around $0.1269 with a market capitalization of approximately $766.76 million, according to CoinMarketCap . The daily trading volume rose by 17.48%, revolving around $112.82 million. This drop in the Arbitrum ARB -1.72% is showing that traders are being very careful in the Layer 2 scaling sector. Despite this drop in the crypto market, the network is still seeing some good activities. KelpDAO Hack and Lazarus Group Attack Hit Arbitrum Hard The main reason behind this recent drop is the aftershocks of the KelpDAO security incident after the bizarre cyber attack. This is the largest DeFi exploit of this year. On April 21, attackers who are linked to the Lazarus Group managed to steal around $293 million. They did this by targeting a single verifier weak point in the protocol cross-chain messaging system. Arbitrum is working as a major hub for liquid staking assets like rsETH. Because of this, the shock from the event sparked a huge rush of money being removed from the network. More than $13 billion in Total Value Locked (TVL) was pulled out of the ecosystem within 48 hours. Users rushed to lower their risk in the situation of any further damage. In order to avoid this, the Arbitrum Security Council has taken quick action and frozen 30,766 Ethereum tokens that were linked to the hack. However, once again, such hacking incidents are damaging users’ trust in DeFi and raising questions about security lapses in decentralized infrastructure. A similar drop was also seen in other cryptocurrencies like AAVE . Technical Levels Show Support at $0.121 and Resistance at $0.135 According to the current price chart and technical analysis, Arbitrum is now testing very important levels. These levels are expected to decide the direction of the token for the coming month. The price is currently revolving around an important low of $0.121. This is the most immediate and vital support line for the asset. If the price fails to stay above this level, it could plunge toward the all-time low of $0.09. This law is also confirmed by the lower edge of the Bollinger Bands. On the other hand, Arbitrum might face strong resistance at around $0.135. In the past, the cryptocurrency failed to break this level due to heavy selling pressure. According to the TradingView price chart, the Relative Strength Index (RSI) is currently hovering around 56. This shows that the cryptocurrency is currently in a neutral state without entering into overbought and oversold territory. It means that the cryptocurrency currently has no sign of reversal in the trend. While this drop is creating selling pressure on Arbitrum, there is another factor that could affect its price. On May 16, approximately 92.65 million ARB tokens will be released. The cumulative value of these tokens is around $11 million. This could create more downward pressure if demand does not go up by the same amount. However, there is a strong institutional adoption as Robinhood has decided to build a dedicated blockchain using the Arbitrum technology stack for tokenized assets. Tokenization is one of the rapidly growing sectors right now, which currently holds around $18.44 billion in market capitalization. Also Read: Uniswap Price Drops 5% as it Risks Breaking $3.22 Support
23 Apr 2026, 22:30
Cryptoquant: KelpDAO Hack ‘Contagion’ Triggers Worst DeFi Liquidity Crunch Since 2024
The KelpDAO exploit allowed an attacker to siphon unbacked rsETH tokens and deposit them into Aave, triggering one of the sharpest liquidity contractions in recent DeFi history, according to the latest Cryptoquant report dubbed the “ DeFi Contagion.” Key Takeaways: The KelpDAO exploit on April 18, 2026, exposed Aave to an estimated $124M-$230M in bad
23 Apr 2026, 22:03
DeFi attack wipes $292 million as $10B exits Aave
🚨 A $292 million hack triggered $10 billion in withdrawals from Aave. The attacker exploited a LayerZero-KelpDAO vulnerability to mint fake rsETH and borrow assets. Continue Reading: DeFi attack wipes $292 million as $10B exits Aave The post DeFi attack wipes $292 million as $10B exits Aave appeared first on COINTURK NEWS .
23 Apr 2026, 20:52
KelpDao Funding Move: Lido Proposes $6M Allocation Of Staked ETH To Bridge Shortfall
KelpDAO’s liquid restaking token, rsETH, has become the center of a major DeFi recovery effort after a hack estimated at roughly $290 million. The latest development came on Thursday, when Lido Finance unveiled a proposal aimed at supporting Aave’s (AAVE) coordinated response to the rsETH shortfall. Lido Joins rsETH Recovery Effort The Lido plan was submitted to Aave’s Research Forum following this week’s Kelp incident involving the rsETH LayerZero bridge exploit. While the exploit’s details were still unfolding, Aave moved quickly to organize a larger, ecosystem-wide effort—“DeFi United”—with the goal of making affected users whole after the April 18 bridge incident left rsETH underbacked and, in turn, put funds at risk across multiple lending markets. Aave posted on social media platform X (formerly Twitter) that “multiple strong indicative commitments” had already been lined up, and that Lido Finance was the first public participant. Related Reading: Bitcoin Nears $80,000: Two Scenarios That May Decide Q2—Bulls Or Bears? The proposal itself authorizes a one-time, capped contribution of up to 2,500 stETH—roughly $6 million at the time of reporting. Importantly, Aave framed this as part of a fully funded recovery package rather than a piecemeal attempt to patch only part of the damage. The structure is meant to limit broader spillover and allow an orderly resolution for users impacted by the rsETH deficit. The conditions attached to Lido’s contribution are strict. Lido Finance’s funds would only be deployed if the relief vehicle is large enough to cover the entire deficit—specifically, not a partial fix that still leaves users exposed. The total shortfall is described as exceeding 100,000 ETH. If any funds remain unused, they would be returned to Lido’s treasury. And the money can only be used to address the rsETH shortfall itself. Market-Wide TVL Losses Lido’s interest in this outcome is closely tied to its own product exposure. Lido offers an EarnETH vault that has direct exposure to rsETH. Without coordinated support, losses for users in that vault could reach approximately 9,000 ETH. Aave also moved to limit further risk while recovery planning progressed. Earlier Thursday, it updated that rsETH reserves were paused across multiple Ethereum and rollup environments, including Ethereum Core, Arbitrum, Base, Mantle, and Linea. Related Reading: 4-Figure XRP: How High Will The Price Be If Ripple Captures 50% Of SWIFT? The broader market reaction has been severe. Since the heist news first emerged on Saturday, Aave has reportedly recorded around $9 billion in net outflows as of April 21. Total value locked on the platform fell by more than a third, dropping to about 17.5 billion. That figure has since declined further, reaching approximately 14.3 billion at the time of this writing. The damage extended beyond Aave as well: according to DefiLlama data, across all decentralized lending protocols, TVL fell by roughly $13 billion within 48 hours after the exploit. Featured image from OpenArt, chart from TradingView.com
