DeFi United Raises 132,650 ETH to Cover Kelp DAO Losses
DeFi United collected 132,650 ETH (about $303M) to potentially restore rsETH and cover losses from Kelp DAO’s April 18 exploit; use depends on governance votes.
DeFi United raised 132,650 ETH, roughly $303 million at current prices, to potentially restore rsETH and cover losses from Kelp DAO following an April 18 exploit. Use of the funds depends on a series of governance votes across multiple protocols.
The relief effort was promoted by Aave founder Stani Kulechov, who pledged 5,000 ETH. Consensys committed 30,000 ETH and the Avalanche Foundation announced support. Aave service providers have been active in organizing the response, and DeFi United’s website lists the total and notes that execution requires approvals from tokenholders governing other decentralized finance projects.
On April 18 attackers drained rsETH from Kelp DAO and used the token to borrow large sums from Aave, creating bad debt and straining liquidity for depositors. The DeFi United pool is meant to restore rsETH’s backing and offset the shortfall created by those borrowings.
Several governance actions must clear before funds can be moved. The security council overseeing Arbitrum has frozen 30,765 ETH that attackers left exposed. A proposal to direct those frozen funds to DeFi United estimates the process could take about 49 days.
Other protocols expected to hold votes include Mantle, Ether.Fi and Lido. The outcome of each vote will change the final amount available to the coalition and the timing of any transfers.
The exploit pushed Aave users to borrow stablecoins to withdraw value, driving up utilization in USDT and USDC markets. After near-full utilization last week, those markets showed about 92% utilization on Monday. Tron DAO and the exchange HTX supplied roughly $20 million in USDT to Aave to help replenish liquidity.
DeFi United’s website warns the operation is not guaranteed to succeed. Organizers emphasize the plan depends on coordination across protocols and timely governance decisions. If all votes pass and frozen assets are redirected as proposed, the raised ETH would be large enough to offset the value of the rsETH removed in the exploit.
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