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 X. The platform noted that the largest contributors, Mantle and Aave DAO, have together raised 55,000 ETH, equivalent to $127 million. Following a $292 million security breach that left Aave facing a financial crisis, the company joined forces with major crypto firms to launch a coordinated recovery effort, dubbed DeFi United. This initiative, led by Aave service providers, aims to restore support for rsETH, a yield-bearing derivative token of ether at the core of the exploit.
Aave founder Stani Kulecho has personally contributed 5,000 ETH, valued at approximately $11,730,000. The exploit, which was traced back to a vulnerability in the KelpDAO integration with LayerZero, resulted in the attacker minting 116,500 unbacked rsETH tokens, leaving Aave with impaired collateral and triggering a significant withdrawal of deposits. The current effort focuses on stabilizing the system through a coordinated bailout, seeking to recapitalize rsETH and mitigate losses. Notably, this incident follows the second-largest exploit of the year, which occurred in late March when an attacker drained at least $270 million from the Drift Protocol on Solana by exploiting a legitimate feature.