Crypto Coalition Unveils Plan to Mitigate Aave Token Exploit

In a bid to rectify the damage caused by the recent Kelp DAO hack, DeFi United has proposed a step-by-step plan to restore the backing of rsETH. The hack, which occurred on April 18, exploited a vulnerability in rsETH's bridge, resulting in the creation of 116,500 rsETH tokens without proper backing. These tokens were then dispersed across multiple wallets and utilized as collateral on various lending platforms, including Aave. The proposal, which has been shared on Aave's official X account, aims to tackle the issue by re-collateralizing rsETH and unwinding the loans created using the exploited tokens. DeFi United claims to have secured sufficient ETH commitments to fully re-collateralize rsETH and plans to introduce this ETH into the system in stages. The group also intends to carefully unwind the affected loans on Aave, allowing for a more controlled and stable resolution. By doing so, the proposal estimates that around 13,000 ETH could be recovered from Aave alone, which would then be converted into ETH to cover the shortfall created by the exploit. While the plan is not without risks, it represents a coordinated effort to stabilize the affected markets and restore the backing of rsETH.