Coalition Unveils Plan to Mitigate $300 Million Crypto Exploit Impact on Aave Users

Unlike typical massive financial holes, this one may have a detailed repair guide. DeFi United, spearheading the Kelp DAO recovery, has outlined a plan to restore rsETH backing after a hack sent shockwaves through lending markets, releasing over 116,000 unaccounted tokens. The proposal, shared on Aave's official X account, details a coordinated effort utilizing Aave's infrastructure to unwind the damage and stabilize markets. The exploit, which occurred on April 18, involved an attacker forging a message to trick the Ethereum system into releasing 116,500 rsETH without backing. These tokens were then deployed across DeFi, with a significant portion used as collateral on Aave and other lending platforms, causing systemic issues. With most of the exploited funds still active, DeFi United's proposal aims to restore rsETH backing and unwind the loans created with the extra tokens. The plan involves lining up ETH commitments to re-collateralize rsETH and carefully unwinding the mess in lending markets. This includes dealing with positions opened by the attacker on Aave, which can be closed in a controlled manner by temporarily adjusting rsETH valuation. The proposal estimates this could recover around 13,000 ETH from Aave, which can be used to cover the shortfall. The process, while not risk-free, reflects a coordinated response and aims to fully restore rsETH backing and stabilize affected markets.