Aave raises nearly 80% of the $200 million it needs to cover bad debt left by Kelp DAO exploit
Blockchain analytics platform Arkham said that the largest contributors are Mantle and Aave DAO, having raised a combined $127 million.
What to know:
- Aave has raised about $160 million of the roughly $200 million it needs to cover bad debt from the KelpDAO exploit, the year’s largest DeFi exploit.
- The DeFi United recovery effort, led by Aave service providers, aims to recapitalize and restore support for rsETH, the ether-based token at the center of the attack.
- Major contributors including Mantle, Aave DAO and Aave founder Stani Kulechov have collectively pledged tens of thousands of ether to stabilize the platform and broader DeFi markets.
Last week, Aave and several major crypto firms announced a coordinated recovery effort to stabilize DeFi markets after a $292 million security breach left the crypto borrowing sector’s largest lender facing a financial crisis.
Called DeFi United and led by Aave service providers, the effort’s goal is to restore support for rsETH, the yield-bearing derivative token of ether (ETH) at the core of the exploit.
“I’m personally contributing 5,000 ETH to DeFi United as we continue working together with partners,” said Aave founder Stani Kulecho. His personal contribution at ether’s current price of roughly $2,346 is worth $11,730,000.
The exploit is traced back to a KelpDAO integration vulnerability with LayerZero, where an attacker minted 116,500 unbacked rsETH tokens. That left Aave with impaired collateral, triggering a run on deposits as lenders rushed to exit, ultimately withdrawing $10 billion.
