Aave, a leading lending platform, has successfully raised approximately $160 million to mitigate the $200 million in bad debt resulting from the Kelp DAO exploit, the largest DeFi breach this year. As reported by Arkham on X, the primary contributors to this effort are Mantle and Aave DAO, who together have contributed 55,000 ETH, valued at $127 million.
Following a coordinated recovery initiative announced last week by Aave and major crypto firms, the goal is to stabilize DeFi markets and restore support for rsETH, the yield-bearing derivative token of ether. This effort, known as DeFi United, aims to address the financial crisis triggered by a $292 million security breach.
Aave's founder, Stani Kulecho, has personally contributed 5,000 ETH, valued at approximately $11.7 million. The exploit, which originated from a vulnerability in KelpDAO's integration with LayerZero, led to the minting of 116,500 unbacked rsETH tokens, causing significant collateral damage to Aave and prompting a massive withdrawal of $10 billion. The current focus is on a coordinated bailout to recapitalize rsETH, minimize losses, and restore system stability.