Aave, a leading lending platform, has successfully raised approximately $160 million to address the $200 million in bad debt resulting from the Kelp DAO exploit, as reported by Arkham on Saturday. The largest contributors to this effort are Mantle and Aave DAO, who together have contributed $127 million, equivalent to 55,000 ETH. This coordinated recovery effort, known as DeFi United, aims to stabilize DeFi markets following a $292 million security breach that left Aave facing a significant financial crisis. The initiative, led by Aave service providers, focuses on restoring support for rsETH, a yield-bearing derivative token of ether at the center of the exploit.
Aave founder Stani Kulecho has personally contributed 5,000 ETH, valued at around $11,730,000, to support this endeavor. The exploit, which was linked to a vulnerability in the KelpDAO integration with LayerZero, resulted in the minting of 116,500 unbacked rsETH tokens, leaving Aave with impaired collateral and triggering a significant withdrawal of deposits. The primary objective of DeFi United is to stabilize the system through a coordinated bailout, aimed at recapitalizing rsETH and mitigating losses. This incident is the largest DeFi exploit of the year, surpassing the second-largest exploit, which occurred in late March when an attacker drained at least $270 million from the Drift Protocol on Solana.