KelpDAO commits 2,000 ETH to DeFi united recovery fund for rsETH restoration

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KelpDAO announced April 30 it has completed its committed contribution to the recovery fund, providing 2,000 $ETH in treasury funds to the DeFi United recovery plan led by Aave, aimed at restoring peg support for rsETH and promoting the system’s return to normal operation. The funding represents a one-time investment intended to restore rsETH to its nominal exchange rate following the $292 million exploit that struck on April 18.

“As part of that commitment, we are contributing 2,000 $ETH from our treasury directly to DeFi United,” KelpDAO stated. The protocol emphasized that its internal commitment before any public statement was that “rsETH holders will not be abandoned,” noting the contribution is a direct manifestation of that pledge.

Multi-Protocol Recovery Effort

DeFi United, in collaboration with multiple ecosystem participants including Mantle, Consensys, Arbitrum, Lido Finance, and LayerZero, has formulated a recovery path that includes re-capitalization of the bridging treasury, restoration of oracle functionality, and addressing funding gaps in affected markets. The coalition has tentatively raised more than $302 million to date, much of it from DAOs and crypto businesses within the ecosystem.

Major contributors include Consensys and Joseph Lubin with 30,000 $ETH (approximately $69 million), Mantle with 30,000 $ETH as a low-interest loan, Aave DAO with a pending vote for 25,000 $ETH (approximately $57.5 million), and LayerZero with 10,000 $ETH (approximately $23 million). The Arbitrum Security Council also froze 30,766 $ETH (approximately $71 million) in attacker funds pending a governance vote.

The April 18 exploit drained 116,500 rsETH—worth about $290 million to $293 million—from KelpDAO’s LayerZero-powered bridge, representing roughly 18% of rsETH’s total supply. The attacker used the tokens as collateral across Aave, Compound v3, and Euler to borrow an estimated $236 million in $ETH and WETH, leaving protocols with significant bad debt.

KelpDAO stated its investment helps accelerate the overall repair process, noting that as funds from various parties gradually come into place, collateral support for rsETH will gradually return to normal. The company committed to continue updating the community on progress as the recovery advances.