Aave Unveils "DeFi United" Relief Fund to Rebuild rsETH Backing After Kelp Exploit

Aave is rallying partners across decentralized finance under a coordinated recovery effort dubbed "DeFi United," aimed at helping affected users after recent losses, CoinDesk reported. The move follows the April 18 incident involving the Seaweed Bridge, which left the liquid staking token rsETH undercollateralized and exposed positions across multiple lending markets to risk. In a post on X dated April 23, Aave said there are "multiple strong indicative commitments" to support the recovery, naming Lido Finance as the first participant to be disclosed publicly. Lido contributors have since filed a governance proposal seeking approval to allocate up to 2,500 Lido staked ETH (stETH), worth about $5.7 million, to a dedicated relief fund. The proposal states the funds would be used exclusively to reduce the rsETH deficit. Lido estimates the overall shortfall at more than 100,000 ETH, and both Aave and Lido said other service providers have already signaled intentions to contribute. Lido also cautioned that depositors in the EarnETH vault could face losses of up to roughly 9,000 ETH in the absence of comprehensive protections. Separately, Aave said it has paused the rsETH reserve across Ethereum mainnet, Arbitrum, Base, Mantle, and Linea to support the recovery process. Additional commitments will be announced once finalized, Aave said. This article was produced with assistance from an AI workflow and was manually curated, edited, and fact-checked.