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 largest contributors to this effort are Mantle and Aave DAO, who together have contributed 55,000 ETH, equivalent to $127 million.
This development follows the announcement of a coordinated recovery effort, dubbed DeFi United, aimed at stabilizing the DeFi market after a significant security breach. The breach, which occurred due to a vulnerability in the KelpDAO integration with LayerZero, resulted in the minting of 116,500 unbacked rsETH tokens, ultimately leading to a loss of $292 million. Aave founder Stani Kulecho has personally contributed 5,000 ETH, valued at approximately $11,730,000, to support this initiative. The primary objective of DeFi United is to restore confidence in rsETH, a yield-bearing derivative token of ether, and to mitigate the losses incurred.
This exploit has been identified as the largest DeFi exploit of the year, with the second-largest occurring in late March, where an attacker drained at least $270 million from the Drift Protocol on Solana.