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, as reported by Arkham on Saturday. The blockchain analytics platform noted that the largest contributors, Mantle and Aave DAO, have collectively raised 55,000 ETH, equivalent to $127 million. This development follows a coordinated recovery effort, known as DeFi United, launched by Aave and major crypto firms to stabilize DeFi markets after a $292 million security breach. The initiative aims to restore support for rsETH, a yield-bearing derivative token of ether, which was at the center of the exploit.
Aave founder Stani Kulechov has personally contributed 5,000 ETH, valued at around $11,730,000, to support the effort. The exploit, which was attributed to a vulnerability in KelpDAO's integration with LayerZero, resulted in the minting of 116,500 unbacked rsETH tokens, impairing Aave's collateral and triggering a significant withdrawal of deposits. The current focus is on stabilizing the system through a coordinated bailout to recapitalize rsETH and minimize losses.