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 blockchain analytics platform Arkham on Saturday. The largest contributors to this effort are Mantle and Aave DAO, which together have raised 55,000 ETH, equivalent to $127 million.
Following a coordinated recovery initiative announced last week, Aave and major crypto firms are working together to stabilize DeFi markets after a significant security breach. The DeFi United effort, 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, linked to a KelpDAO integration vulnerability with LayerZero, led to the minting of 116,500 unbacked rsETH tokens, resulting in impaired collateral for Aave and triggering a substantial withdrawal of $10 billion.
The primary focus of the recovery effort is to stabilize the system through a coordinated bailout, aiming to recapitalize rsETH and mitigate losses.