Court Clears Path for Arbitrum ETH Transfer to Aave LLC
Court Clears Path for Arbitrum ETH Transfer to Aave LLC
⚖️ Court ruling unlocks recovery
A court has modified a restraining notice to allow Arbitrum DAO's onchain vote and transfer of frozen ETH to Aave LLC for rsETH recovery efforts.
Key developments:
- Plaintiff-judgment creditors served restraining notice on May 1 targeting ETH frozen after rsETH incident
- Aave LLC filed emergency motion to vacate the notice
- Court modified notice on May 8 to permit transfer while restraining notice attaches to Aave LLC
- Amended Constitutional AIP maintains recovery intent approved by Arbitrum DAO
- ETH remains directed toward rsETH recovery as legal proceedings continue
Background: The frozen ETH stems from the April 18 Kelp DAO rsETH bridge exploit. Arbitrum DAO previously voted with strong support (190M+ ARB tokens) to release the funds to DeFi United, a cross-protocol recovery effort led by Aave service providers alongside partners including Lido, EtherFi, Ethena, and LayerZero.
Aave service providers and ecosystem partners have established a recovery fund that factors in pending DAO votes, including the Arbitrum governance vote, indicative agreements, and successful execution to restore rsETH’s full backing. We are DeFi United, and resolving this for
Update on rsETH incident: rsETH reserves have been paused across Ethereum Core, Arbitrum, Base, Mantle, and Linea. This was done with the objective of recovering additional funds as the recovery plans progress. We will keep the community updated on the next steps as the
As we continue our efforts towards restoring rsETH's backing, @ether_fi has also stepped up to contribute and published a proposal to their DAO. EtherFi has been a great partner to the Aave ecosystem and we look forward to our continued collaboration with them. DeFi United.
The EtherFi Foundation is proposing to contribute 5k ETH to the rsETH dedicated relief vehicle. This vehicle will protect users and prevent bad debt across DeFi. More details in the proposal: snapshot.org/#/s:etherfi-da…
After discussions with several stakeholders, Aave service providers, @Ether_fi, @KelpDAO, @LayerZero_Core, @compound_xyz, and others have submitted a governance proposal to the @arbitrum DAO requesting the release of ETH frozen by the Arbitrum Security Council following the April
Thanks to @LayerZero_Core, who has been actively engaging with Aave and the broader DeFi United movement since the moment the rsETH incident occurred. Their contribution advances our plan to restore rsETH's backing and normalize market conditions.
LayerZero Labs is pledging more than 10,000 ETH to @Aave-led DeFi United efforts. We are: • Donating 5,000 ETH to DeFi United • Depositing an additional 5,000 ETH to strengthen Aave markets liquidity • Strategically deepening GHO liquidity
The rsETH markets on Aave V3 and Aave V4 have been frozen. Aave's contracts have not been exploited and this is an exploit related to rsETH. The freeze follows an exploit of the Kelp DAO rsETH bridge. Freezing the rsETH markets prevents new deposits and borrowing against rsETH
Thanks to the 1,600+ addresses representing over 190 million ARB tokens who have voted on unfreezing the ETH related to the April 18 rsETH incident, currently held by the Arbitrum DAO. Reaching quorum with a strong show of approval from delegates and the Arbitrum community is a
Update on rsETH incident: According to our analysis, rsETH on Ethereum mainnet is fully backed. Out of an abundance of caution, rsETH remains frozen across Aave V3 and V4 and exposure to the incident is capped. WETH reserves also remain frozen across affected markets including
Our work toward restoring rsETH's backing continues, with @ethena contributing to the ongoing effort. We're grateful for Ethena's longstanding commitment to Aave and DeFi. There's lots in store for Aavethena. DeFi United.
Ethena has been working closely with affected parties this week in a supporting capacity and is participating with a contribution into @aave's coordinated DeFi relief effort following the rsETH related incident. As part of a broader recovery initiative alongside other ecosystem
Aave service providers have published an Aave DAO governance proposal to contribute 25,000 ETH to the ongoing DeFi United effort. Aave DAO's ETH contribution would go towards the plan to restore rsETH's backing to try and normalize market conditions as quickly as possible. DeFi
Update on Arbitrum DAO proposal: On May 1, plaintiff-judgment creditors in an unrelated matter served a restraining notice on Arbitrum DAO targeting the ETH immobilized after the rsETH incident. A few days later, Aave LLC filed an emergency motion to vacate. On May 8, the court
Update on rsETH incident: @LlamaRisk has published a report outlining the rsETH incident, the immediate actions taken, its impact on Aave, and potential paths forward. All service providers have been working to assess the two potential bad debt scenarios on the Aave protocol.
Aave service providers have been leading the DeFi United effort to restore rsETH's backing since the April 18 incident. We believe ecosystem collaboration matters most in moments like this, and our priority is achieving the strongest possible available outcome for users.
A proposal for Lido DAO to contribute to @aave’s coordinated rsETH relief effort has landed on the Research Forum following this week’s Kelp's rsETH LayerZero bridge exploit. The proposal authorizes a one-time, capped contribution of up to 2,500 stETH to a dedicated relief
Update on rsETH incident: WETH reserves on the Ethereum Core V3 market have been unfrozen and users can supply WETH to Ethereum Core V3 again. WETH LTV remains at 0. WETH reserves on Ethereum Prime, Arbitrum, Base, Mantle, and Linea remain frozen. Aave service providers will
The proposal to release the ETH frozen by the Arbitrum Security Council to DeFi United has moved to Snapshot for its first round of voting. These funds would support efforts to restore rsETH’s backing and normalize market conditions. snapshot.org/#/s:arbitrumfo…
In line with the technical plan outlined below, the attacker's rsETH positions on Aave have been liquidated on Ethereum and Arbitrum. The liquidated collateral now sits with the Recovery Guardian as specified in the AIP. No other users were affected, and Umbrella was also
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Aave Protocol Restructures Bug Bounty Programs
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) The community can review and provide feedback on the proposed changes through the governance forum.
Aave Increases Bug Bounty Payouts 5x for V4 and Core V3
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 program on Sherlock, aimed at creating an always-on security reporting channel with improved triage to handle high-severity reports urgently.
rsETH Bridging Reopens After Technical Recovery
**rsETH operations are resuming** after a successful technical recovery. The first tranche of rsETH has been transferred into the LayerZero OFT adapter, reopening bridging between mainnet and Layer 2 networks. **Key developments:** - Initial recovery steps completed, including burning exploiter's rsETH on Arbitrum - LayerZero OFT adapter being progressively refilled - Cross-chain bridging functionality restored The phased approach allows for careful monitoring as operations return to normal over the coming days.
Aave Pro Launches Unified Markets Dashboard for V4
**Aave Pro introduces a comprehensive markets feature** that consolidates critical protocol information into a single interface. **Key features include:** - Market data and analytics - Deposit and borrow asset tracking - Connected hubs overview - Market composition breakdown The new dashboard is now available for users to explore on Aave V4. This update follows Aave's recent security-focused expansion, which saw supply and borrow caps increased across multiple assets to handle growing deposit volumes. Aave Pro serves as the primary interface for V4, enabling users to earn, borrow, swap, and monitor positions through a unified platform.