Hundreds of Millions Pouring into Rescue Plan for Aave Users After Massive Crypto Hack

In the often-fragmented realm of decentralized finance, crises have a tendency to reveal underlying weaknesses. However, the current situation is also showcasing an uncommon level of unity and cooperation. Aave, a leading lending protocol in the DeFi space, is at the forefront of a comprehensive recovery effort following significant losses stemming from the Kelp DAO exploit. This endeavor, informally referred to as 'DeFi United,' has garnered approximately $303 million in commitments as of Monday, based on its website, with much of the capital pending governance approval. The exploit, which had a ripple effect on rsETH markets and created risk across lending positions on Aave, has prompted what appears to be one of the most unified industry responses to a DeFi incident to date. According to an Aave Labs spokesperson, 'There's a shared priority around supporting users and restoring normal market conditions.' Many participants in this effort have deep connections to DeFi, whether through infrastructure, capital, or user access, and have a vested interest in ensuring markets function as expected. At the core of this effort is Aave itself, with a governance proposal outlining a plan for the DAO to allocate up to 250,000 ETH as part of the recovery. Aave's founder, Stani Kulechov, has also indicated he will personally donate 5,000 ETH. Other contributors within Aave's orbit are stepping in, including Emilio Frangella, Ernesto Boado, BGD Labs, and Marcelo Ruiz de Orlano. The response has quickly expanded beyond Aave, with some contributions initiated through direct outreach. Following the April 18 bridge hack that impacted rsETH, Kulechov reached out to Consensys and other ecosystem participants to help coordinate a response. Consensys, alongside its founder Joseph Lubin, agreed to commit up to 30,000 ETH in financial support to advance the recovery and protect users. Sharplink played a strategic advisory role in these discussions. 'The Ethereum ecosystem has always been at its best when it moves together,' Lubin stated. 'DeFi United is exactly that - a broad, coordinated response to protect users and strengthen the infrastructure we've all helped build. Consensys is proud to contribute alongside other stewards in the ecosystem.' The effort has also attracted smaller contributions from across the community. Lido has proposed allocating up to 2,500 stETH, while EtherFi is discussing a 5,000 ETH plan to support users and limit bad debt across DeFi. Mantle has proposed a 30,000 ETH credit facility loan, adding to a growing pool of backstop liquidity. Compound has also put forward a proposal to give up to 3,000 ETH to the fund. Other contributions are taking the form of deposits into Aave itself. Babylon Foundation plans to deposit $3 million in USDT, and Renzo has supplied over $10 million from its treasury. Circle Ventures is purchasing AAVE tokens, and additional deposits have come from entities including Avalanche Foundation, Solana Foundation, and Justin Sun, according to Aave Labs. The list of participants continues to grow, with entities such as Ethena, LayerZero, Frax Finance, and Ink Foundation, alongside Tyro, contributing. These are long-standing relationships across the ecosystem, with teams like Consensys, Sharplink, and others having been in close contact throughout. Not all contributions are structured the same way, with some participants offering grants, others deposits, and several extending credit lines, highlighting different approaches to balancing support with risk management. In parallel, Aave Labs has put forward a proposal asking Arbitrum governance to approve the release of roughly 30,765.67 ETH immobilized by the network's Security Council into the coordinated remediation effort, with the goal of 'making affected rsETH holders whole' and restoring rsETH's backing. Much of the capital remains subject to governance approval, and several proposals are still under discussion. Even so, the breadth of participation underscores how widely the exploit's impact has been felt across DeFi. 'The Ethereum ecosystem has always been at its best when it moves together,' Lubin said. 'DeFi United is exactly that: a broad, coordinated response to protect users and strengthen the infrastructure we've all helped build.'