Aave DAO moves to commit 25,000 ETH as Kelp rsETH shortfall gets covered

Aave DAO service providers have proposed a 25,000 ETH treasury contribution to help restore Kelp DAO’s rsETH backing, joining a wider DeFi United recovery effort that now appears to cover the shortfall created by the April 18 bridge incident.

The proposal follows the exploit of Kelp DAO, which caused an rsETH backing shortfall after 152,577 rsETH was extracted from the Ethereum LayerZero adapter, creating an original gap of about 163,183 ETH.

Aave’s proposed contribution joins donations from ecosystem protocols and individual backers. Lido DAO and Ether.fi proposed contributions of up to 2,500 ETH and 5,000 ETH, while Aave founder Stani Kulechov pledged 5,000 ETH and senior engineering executive Emilio Frangella committed 500 ETH. Golem also pledged 1,000 ETH, while Mantle proposed a low interest credit facility of up to 30,000 ETH to help Aave absorb remaining bad debt.

A tracker shared by a user on X estimated the rsETH hole at 112,204 rsETH, or about 118,400 ETH, and showed the gap filled after accounting for Aave’s proposed 25,000 ETH contribution, Mantle’s facility, Arbitrum’s frozen funds, expected excess rsETH recoveries on Aave and Compound, and pledges from Lido, Ether.fi, Stani, Golem, BGD Labs, Emilio and other backers.

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