Aave, a 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 Arkham on X. The analytics platform noted that the largest contributors, Mantle and Aave DAO, have together raised $127 million, equivalent to 55,000 ETH.
This development comes after Aave and several prominent crypto firms launched a coordinated recovery effort, known as DeFi United, to stabilize DeFi markets following a $292 million security breach. The initiative aims to restore support for rsETH, a yield-bearing derivative token of ether, which was at the center of the exploit.
Aave's founder, Stani Kulecho, has personally contributed 5,000 ETH to DeFi United, valued at around $11,730,000. The exploit, which originated from a vulnerability in KelpDAO's integration with LayerZero, led to the minting of 116,500 unbacked rsETH tokens, resulting in impaired collateral for Aave and a subsequent run on deposits. The current effort focuses on stabilizing the system through a coordinated bailout to recapitalize rsETH and mitigate losses. This incident follows another significant exploit in late March, where an attacker drained at least $270 million from the Drift Protocol on Solana by exploiting a legitimate feature called 'durable nonces'.