Aave V4 Integrates Chainlink SVR to Capture MEV Revenue from Liquidations

Aave has successfully completed the technical recovery following the April 18 rsETH exploit. **WETH loan-to-value ratios have been restored to pre-incident levels** across all affected networks including Ethereum Core, Ethereum Prime, Arbitrum, Base, Mantle, and Linea. The recovery marks the end of a month-long coordinated effort dubbed "DeFi United" that involved multiple protocols including Lido, EtherFi, Ethena, LayerZero, and Compound. The initiative successfully restored rsETH's backing through a combination of: - Liquidation of the attacker's positions on Ethereum and Arbitrum - A recovery fund established by Aave service providers and ecosystem partners - Arbitrum DAO's approval to release frozen ETH (despite legal complications from unrelated creditors) - Contributions from major DeFi protocols All WETH operations have returned to normal functionality across affected V3 deployments. The incident, which originated from an exploit of the Kelp DAO rsETH bridge, required freezing rsETH markets and WETH reserves as a precautionary measure. For more details on the recovery plan: [Aave Governance Forum](https://governance.aave.com/t/arfc-rseth-incident-funding-update/24740)

Aave V3's Searcher Value Redistribution (SVR) integration has generated over $11 million for the DAO treasury since March 2025. This revenue would have otherwise been captured by third-party searchers through MEV extraction. **Key Points:** - SVR recaptures non-toxic liquidation MEV and redirects it to the protocol - The integration is currently live on Ethereum, Arbitrum, and Base - Plans are underway to integrate SVR with the upcoming Aave V4, which will further expand this revenue stream - The feature was adopted through a near-unanimous governance vote The SVR mechanism allows Aave to monetize liquidation opportunities that would typically be extracted by external searchers, creating a new sustainable revenue source for the protocol's treasury. [Read the full technical update](<https://governance.aave.com/t/v4-technical-maintenance-updates/24915/2>)

Aave has announced a restructuring of its bug bounty programs to enhance security measures across the protocol. **Key Changes:** - Updated bounty structure and reward tiers - Modified scope and eligibility criteria - Enhanced reporting procedures for security researchers The restructure aims to strengthen the protocol's security framework and incentivize responsible disclosure of vulnerabilities. This follows a recent security review conducted by Trail of Bits in February 2026. Full details of the changes are available in the governance proposal: [ARFC: Aave Protocol Bug Bounty Programs Restructure](https://governance.aave.com/t/arfc-aave-protocol-bug-bounty-programs-restructure/24816) Security researchers and community members are encouraged to review the updated guidelines.

Aave has revamped its bug bounty program with significantly higher rewards and streamlined processes. **Key Updates:** - Critical bug payout caps increased **5x** for Aave V4 and Core Aave V3 - Payouts now better aligned with risk profiles across different ecosystem components - Simplified review pathways for security researchers This follows Aave Labs' March proposal to launch a dedicated V4 bug bounty on Sherlock, creating an always-on security channel with improved triage to handle high-severity reports urgently.