DeFi United Pledges $303 Million to Recover Aave After Kelp DAO Bridge Exploit

Aave has become the focal point of a coordinated DeFi recovery effort after the Kelp DAO exploit, with industry participants pledging capital and credit lines under a coalition informally dubbed “DeFi United.”

“Industry leaders are pouring hundreds of millions into a rescue plan for Aave users after massive crypto hack The response to the DeFi recovery fund has quickly extended beyond Aave, and in some cases began with direct outreach”

@coindesk

CoinDesk reported that the response has extended beyond Aave and that the effort had “raised about $303 million in commitments as of Monday,” while noting that “much of the capital [was] still pending governance approval.”

@coindesk

CoinDesk also described Aave’s plan to allocate “up to 250,000 ETH as part of the recovery” through a governance proposal, and it said founder Stani Kulechov indicated he would donate “5,000 ETH personally.”

The Defiant said DeFi United “has reached the level needed to fully back rsETH, subject to pending votes, indicative agreements, and successful execution,” after new commitments pushed the coalition past an initial “163,200 ETH shortfall.”

The Defiant also tied the recovery push to the April 18 KelpDAO bridge exploit, saying it “drained 152,577 rsETH from Kelp's LayerZero bridge adapter” and saddled Aave with “between $123.7 million and $230.1 million in bad debt, depending on how Kelp ultimately allocates losses across rsETH holders.”

In parallel, CoinCentral reported that the exploit drained funds through a vulnerability in Kelp DAO’s integration with LayerZero and said “An attacker minted 116,500 unbacked rsETH tokens using the flaw,” then used them as collateral on Aave to borrow wrapped Ether, leaving Aave with “more than $190 million in bad debt.”

The recovery effort is directly linked to the April 18 KelpDAO bridge exploit, which multiple outlets described as rippling into rsETH markets and creating bad debt for Aave.

CoinDesk said the exploit “rippled into rsETH markets and created risk across lending positions on Aave,” and it described the response as a “coordinated DeFi recovery effort” after losses tied to the Kelp DAO exploit.

AMBCrypto

The Defiant provided a more granular accounting, saying the April 18 incident “drained 152,577 rsETH from Kelp's LayerZero bridge adapter” and “saddled Aave with between $123.7 million and $230.1 million in bad debt.”

CoinCentral similarly described the attacker’s method, stating that “The hacker then used the stolen tokens as collateral on Aave to borrow wrapped Ether,” which left Aave with “more than $190 million in bad debt.”

CoinCentral also said the fallout triggered a wave of withdrawals and that “Aave’s total value locked dropped nearly $12 billion in a week as lenders rushed to exit the platform.”

Bloomingbit added that the hack left Aave with “more than $190 million in bad debt” and drove “a sharp drop in total value locked, or TVL,” while also describing Aave Labs’ recovery timeline as “about 49 days.”

ForkLog reported that as of April 26 “the decline in the TVL of the Aave protocol has stabilized,” with the figure “settled around $14 billion,” and it said “since the attack, the volume of deposits on the platform has decreased by more than $12 billion.”

Aave and partner firms framed the recovery as user-first stabilization, while other participants emphasized cross-ecosystem coordination.

CoinDesk quoted an Aave Labs spokesperson saying, “There’s a shared priority around supporting users and restoring normal market conditions,” and it added that “Many of these participants are deeply connected to DeFi.”

CoinDesk also included a statement from Ethereum co-founder Joseph Lubin: “The Ethereum ecosystem has always been at its best when it moves together,” and it said “DeFi United is exactly that, a broad, coordinated response to protect users and strengthen the infrastructure we’ve all helped build.”

The Defiant echoed Lubin’s language, reporting that “Lubin said the Ethereum ecosystem "has always been at its best when it moves together."”

On the funding side, CoinDesk described Consensys and Lubin committing “up to 30,000 ETH,” while also noting that Sharplink “played a strategic advisory role” in discussions.

The Defiant reported that Aave founder Stani Kulechov said the recovery fund “has reached the level needed to fully back rsETH,” and it said his announcement carried caveats including “pending votes, indicative agreements, and successful execution.”

Solana Foundation president Lily Liu provided a cross-chain justification, writing on X, “This is the first time we are lending USDT to @Aave to aid their recovery efforts,” and she added that “economies do not operate in isolation” and that Solana’s health depends on “the health of all DeFi.”

In the same thread, Liu said the foundation would “be introducing $AAVE to Solana this weekend,” linking the bailout to a broader integration push.

Beyond pledges, the recovery plan depends on governance approvals and on unlocking assets frozen by Arbitrum’s Security Council, with multiple outlets describing the same mechanism using different figures.

CoinDesk said Aave Labs put forward a proposal asking Arbitrum governance to approve the release of “roughly 30,765.67 ETH immobilized by the network’s Security Council,” aiming at “making affected rsETH holders whole” and restoring rsETH’s backing.

bloomingbit

Bloomingbit similarly reported that Aave Labs proposed releasing “about 30,765 ETH (about $73.5 million)” and transferring the assets to “recovery fund DeFi United,” and it said the proposal was submitted with support from “Kelp DAO, LayerZero, Ether.fi and Compound.”

CoinCentral described the frozen amount as “30,765 ETH held in a wallet connected to the exploit,” and it said Aave Labs formally proposed that Arbitrum’s decentralized autonomous organization redirect those frozen funds to the DeFi United recovery address.

CoinCentral also said the Arbitrum Security Council “last week froze 30,765 ETH,” and it described the proposal as filed “Saturday on the Arbitrum governance forum,” with support from “Kelp DAO, LayerZero, Ether.fi and Compound.”

The structure of contributions is also a point of emphasis, with AMBCrypto arguing that “not all contributions represent direct loss coverage” and that only donations “permanently reduce the shortfall,” while loans and liquidity support “primarily help stabilize the system.”

AMBCrypto said the recovery plan aims to “fully restore rsETH backing and prevent bad debt from forming across integrated lending markets,” while CoinDesk and The Defiant described a mix of donations, deposits, and credit lines.

ForkLog added that “Aave service providers and ecosystem partners have established a recovery fund that factors in pending DAO votes, including the Arbitrum governance vote, indicative agreements, and successful execution to restore rsETH’s full backing.”

The stakes of the recovery are tied to whether rsETH backing can be restored and whether bad debt can be contained across integrated lending markets, with outlets describing both the scale of commitments and the continuing uncertainty around governance.

“Aave Labs Proposes Releasing $73”

bloomingbit

CoinDesk said the coalition had “raised about $303 million in commitments as of Monday,” but also warned that “much of the capital [was] still pending governance approval,” while it described Aave seeking to unlock frozen ETH on Arbitrum to help make affected rsETH holders whole.

bloomingbit

The Defiant said DeFi United “has reached the level needed to fully back rsETH, subject to pending votes, indicative agreements, and successful execution,” and it described the milestone as following a wave of new commitments over the weekend.

CoinCentral reported that Arkham found Aave had raised “about $160 million of the roughly $200 million it needs,” placing the fund at “around 80% of its target,” while also describing a “49-day timeline for the recovery effort.”

Bloomingbit said DeFi United had raised “about $21 million so far,” and it described additional support of “$215 million” pending governance approval from “Arbitrum, Mantle (MNT) and Lido (LDO).”

ForkLog said the community raised “over 100,000 ETH (~$230 million)” and that this “nearly covers the damage caused by the hack, which was approximately $290 million,” while also listing the largest donors as “Mantle (30,000 ETH) and Aave DAO (25,000 ETH).”

In terms of consequences, ForkLog reported that “the volume of deposits on the platform has decreased by more than $12 billion,” and it said Aave generated “an average of $1.7 million in daily fees—63% of Ethereum’s revenue” during the crisis week.

Meanwhile, CoinDesk and crypto.news highlighted cross-chain interventions, with crypto.news reporting Lily Liu’s confirmation that the foundation would “be introducing $AAVE to Solana this weekend,” and it described the Solana Foundation lending USDT to Aave as part of a recovery effort after the April KelpDAO exploit.

The Defiant also reported TRON founder Justin Sun saying TRON DAO and exchange HTX would jointly supply “$20 million in USDT” to Aave’s Core V3 market, calling it “a show of support to bring AAVE to TRON.”