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

The unprecedented hack has left a substantial hole, but DeFi United is working to devise a solution. The coalition's proposal outlines a step-by-step approach to rectify the damage caused by the release of over 116,000 unaccounted tokens. By leveraging Aave's infrastructure, the plan aims to unwind the harm and restore market stability. The exploit, which occurred on April 18, involved an attacker manipulating the rsETH bridge, resulting in the creation of rsETH tokens without backing. These tokens were then dispersed across multiple wallets and utilized as collateral on various lending platforms, including Aave. DeFi United's proposal seeks to address two primary issues: re-establishing the backing of rsETH and resolving the loans created using the exploited tokens. To achieve this, the group has secured sufficient ETH commitments to re-collateralize rsETH and plans to reintroduce this ETH into the system in stages. Concurrently, the proposal focuses on carefully unwinding the lending market chaos by addressing the attacker's positions on Aave and facilitating a controlled closure of these loans. This will enable the recovery of underlying assets, such as ETH, which can then be used to cover the exploit-related shortfall. The proposal estimates that around 13,000 ETH could be freed from Aave alone. Although the process carries risks, including the need for governance approvals and successful fund deployment, it represents a coordinated effort to stabilize affected markets and restore rsETH backing.