KelpDAO Recovers 73,700 ETH, rsETH Gap Near 89,500 ETH

KelpDAO has shared a fresh update on its ongoing recovery efforts following the recent rsETH incident. The team confirmed that a significant portion of funds has been recovered, though a large gap still remains. The update comes as multiple crypto projects continue to coordinate support under the “DeFi United” initiative.

According to KelpDAO, the initial shortfall stood at 163,200 ETH after the incident. Since then, recovery efforts have brought back 73,700 ETH. This includes around 40,300 rsETH, equal to roughly 43,000 ETH, recovered directly by Kelp. In addition, the Arbitrum Security Council secured another 30,700 ETH. After these steps, the remaining shortfall now stands at about 89,500 ETH.

KelpDAO Hack Recovery Backed by Defi United

The recovery process has involved close coordination with several major players in the crypto ecosystem. Teams from Aave, EtherFi, Lido Finance, Golem, Mantle, Frax Finance, and LayerZero have all contributed in different ways. KelpDAO noted that more announcements are expected as discussions continue and contributions are formalized.

Out of the remaining gap, confirmed public commitments have reached about 43,500 ETH so far. These pledges have come from Mantle, Aave founder Stani Kulechov, EtherFi, Lido, and Golem. KelpDAO said it is working directly with partners to finalize these contributions and move closer to closing the deficit.

The team has added that rsETH holders remain the top priority. It added that updates will continue as more commitments are confirmed and funds are secured. The broader goal is to stabilize the system without putting pressure on users of any single protocol.

At the same time, new ideas are being discussed within the Aave community to handle the situation in a structured way. Marc Zeller has proposed that instead of asking for donations, create a dedicated vault called “DeFi United ETH.” Under this plan, Aave’s wETH income would be redirected into the vault, with a capped annual yield of 5 percent.

The proposal also includes tokenizing the vault deposits into a tradable asset named “AaveETH.” This would allow users to participate and also gradually cover the deficit through both interest and principal repayments. Zeller suggested opening the vault to public deposits and setting its size based on the worst-case shortfall.

He believes that such a model could have raised funds quickly if implemented earlier. He also pointed out that Aave has strong revenue streams, while its DAO and Labs hold large reserves. In his view, these resources could help resolve the issue and reduce the risk of wider market panic. Zeller added that he would commit most of his own ETH to the vault if the plan moves forward.

Along with this, Mantle has proposed using its treasury to provide a liquidity backstop. This support would help Aave manage bad debt created during the incident. The issue arose when attackers used unbacked tokens as collateral, which led to an imbalance across the system.

By offering a loan, Mantle aims to stabilize the market and prevent forced liquidations. Such liquidations could have pushed prices lower and increased losses. Note that this proposal forms part of a wider industry effort to contain the damage and restore balance.

Other contributors have also come forward with support. Lido Finance has committed 2,500 stETH to a dedicated relief fund. Several foundations and ecosystem players are now working together to ensure a coordinated response.

Support for the plan has extended beyond protocol teams. Ben Zhou, co-founder and CEO of Bybit, has publicly backed Mantle’s proposal. He said the exchange would vote in favor of the plan as a major supporter of Mantle. Zhou noted that the crypto industry had come together during previous crises, including incidents involving Bybit, and said similar cooperation remains important now.

The list of participants in the DeFi United effort continues to grow. It includes Aave, EtherFi Foundation, Lido DAO, Golem Foundation, Ink Foundation, LayerZero, Mantle, Arbitrum, Frax Finance, Ethena, Tydro, and Golem Factory.