Aave, a prominent 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 blockchain analytics platform Arkham on Saturday. The largest contributors to this effort are Mantle and Aave DAO, who together have raised 55,000 ETH, valued at $127 million. This development follows the announcement of a coordinated recovery effort, dubbed DeFi United, aimed at stabilizing DeFi markets in the aftermath of a $292 million security breach. Led by Aave service providers, the initiative seeks to restore support for rsETH, the yield-bearing derivative token of ether at the center of the exploit.
Aave founder Stani Kulechov has personally contributed 5,000 ETH, equivalent to $11,730,000 at the current ether price. The exploit, which originated from a vulnerability in KelpDAO's integration with LayerZero, led to the minting of 116,500 unbacked rsETH tokens, causing significant collateral damage to Aave and triggering a massive withdrawal of $10 billion.
The current bailout effort is focused on stabilizing the system and mitigating losses through a coordinated recapitalization of rsETH.