DeFi United Recovery Fund Established for rsETH Incident
DeFi United Recovery Fund Established for rsETH Incident
🤝 DeFi United launches recovery
Aave service providers and ecosystem partners have established a recovery fund to restore rsETH's full backing following the April 18 Kelp DAO bridge exploit.
Key developments:
- Recovery fund established with pending DAO votes, including Arbitrum governance proposal
- Technical alignment reached with Kelp DAO and LayerZero to execute recovery plan
- Multiple ecosystem partners contributing, including Lido, EtherFi, Ethena, and Compound
- Aave DAO proposed contributing 25,000 ETH to the effort
- Arbitrum DAO proposal submitted to release frozen ETH from Security Council
Current status:
- rsETH reserves paused across Ethereum, Arbitrum, Base, Mantle, and Linea
- WETH reserves on Ethereum Core V3 unfrozen; other markets remain frozen
- Final recovery plan and user steps to be announced shortly
The coordinated response demonstrates cross-protocol collaboration to address the incident's impact on affected users.
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
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
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 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
Frax Finance Partners with Aave on Upcoming DAO Proposal
Frax Finance is joining efforts to restore rsETH's backing through a forthcoming DAO proposal. This follows similar support from EtherFi, which recently published their own proposal. **Key developments:** - Frax Finance will present collaboration details via DAO proposal - EtherFi previously contributed with their own DAO proposal - Multiple DeFi protocols coordinating on rsETH backing restoration The partnerships demonstrate growing coordination among major DeFi protocols to address liquidity challenges.
Golem Project and Foundation Contribute 1,000 ETH to rsETH Relief Effort
**Golem Project and Golem Foundation have contributed 1,000 ETH to the ongoing rsETH relief effort.** The contribution adds to the growing DeFi United initiative aimed at helping affected users. This follows previous support from Ethereum stewards Consensys and ethereumJoseph, who committed up to 30,000 ETH to the recovery effort. **Key points:** - 1,000 ETH donation from Golem entities - Part of broader DeFi United relief initiative - Focused on restoring rsETH backing and market stability The collaborative effort demonstrates coordination across DeFi protocols to address the rsETH situation.
Aave Pro Interface Launches for V4 Protocol
Aave has launched **Aave Pro**, a new interface for interacting with Aave V4 Protocol. **Key features include:** - Earning and borrowing capabilities - Token swapping functionality - Position monitoring tools The interface is now available at [pro.aave.com](https://pro.aave.com/) This follows the V4 testnet launch in November 2025, which included a developer preview of the Pro interface. The full announcement details are available on the [Aave blog](https://aave.com/blog/aave-v4-live-ethereum). Aave Pro provides users with a streamlined way to access V4's liquidity protocol features through a web-based interface.
🔍 Aave V4 Opens Security Review
**Aave V4** has entered its **open security review phase** on Sherlock DeFi, marking a key milestone in the protocol's development. The review invites participation from: - Previous Aave auditors - Developers familiar with lending-pool mechanics - Security researchers interested in DeFi protocols This follows Aave Labs' September roadmap announcement, which outlined the final stages before V4's launch including public documentation, testnet deployment, and codebase release. The open review represents a **community-driven approach** to protocol security, allowing experienced auditors to contribute to one of DeFi's most significant upgrades.