Arbitrum DAO Urged To Unfreeze 30,766 ETH Tied To Kelp DAO Exploit

Arbitrum’s governance is being urged to unfreeze funds tied to the Kelp DAO exploit, with a proposal asking the Arbitrum DAO to release about 30,766 ETH that was frozen by the Arbitrum Security Council on April 21.

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Invezz says the governance payout would unfreeze roughly $71 million worth of ETH and frames it as a “credibility catalyst for Arbitrum's DeFi recovery,” while also noting the ARB token traded around $0.1260 as the broader crypto market relinquished its early gains.

Cointelegraph

The same Invezz account says the funds were moved from the exploiter's wallet to an address controlled by the DAO and can only be moved via an official governance vote, with the coalition aiming to redirect the ETH to a dedicated recovery mechanism tied to the broader “DeFi United” initiative.

Invezz further reports that DeFi United has attracted around 102,542 ETH so far, leaving about 60,658 ETH remaining, and it adds that ARB holders face uncertainty if the DAO votes against unfreezing or delays it.

Cointelegraph reports that Mantle tokenholders approved 30K ETH Aave credit facility after an rsETH exploit, linking the facility to addressing the shortfall that created liquidity stress across Aave’s lending markets.

Cointelegraph cites Galaxy Research’s Thursday report that the rsETH exploit pushed Aave’s Wrapped Ether (WETH) market into a prolonged squeeze, with WETH utilization staying above 99% for 12.7 days after the incident.

Cointelegraph

Cointelegraph adds that Galaxy said WETH utilization remained structurally elevated and close to the 100% ceiling, with an average around 99.6% and only easing to about 98.47% by the end of the snapshot period.

Cointelegraph also states that Aavescan data showed Aave’s Ethereum V3 WETH market at about 91.6% utilization on Friday, with roughly 2.02 million WETH supplied and 1.85 million WETH borrowed.

Across the coverage, the immediate question is whether Arbitrum DAO will approve releasing the frozen Kelp-linked ETH to “DeFi United,” which Invezz describes as a coordinated, cross-protocol recovery effort aimed at restoring rsETH coverage and addressing rsETH deterioration for users.

“Arbitrum Price Outlook With Payout to Unfreeze Funds Linked to the Kelp DAO Exploit”

Invezz

Invezz says the funds are held at an address controlled by the DAO and can only be moved via an official governance vote, meaning the Kelp incident remains unresolved if the DAO delays or rejects the plan.

Cointelegraph frames the stakes in terms of liquidity and withdrawals, explaining that high utilization means most of the supplied asset has already been borrowed and leaving little idle liquidity available for immediate withdrawals.

Invezz also ties the market impact to ARB price action, saying ARB fell by nearly 4% over the past 24 hours and traded around $0.1260 with daily trading volume at $76 million, while it highlights potential retesting of support at $0.12 or lower if resolution remains unclear.