A crypto coalition releases technical proposal to save Aave users from a massive token exploit
A coalition called DeFi United has released a technical plan to address the fallout from a Kelp DAO hack that created 116,500 unbacked rsETH tokens, many of which were used as collateral on Aave. The proposal outlines steps to restore rsETH’s backing with fresh ETH and systematically unwind risky loans across DeFi platforms. By coordinating across protocols, the plan aims to stabilize markets and recover approximately 13,000 ETH tied up in affected positions. Success depends on governance approvals and precise execution across multiple blockchain networks.
- ▪DeFi United proposed a coordinated plan to fix the rsETH shortfall caused by a Kelp DAO exploit that generated 116,500 unbacked tokens.
- ▪Most of the exploited rsETH remains active as collateral on Aave and Compound, posing systemic risks to lending markets.
- ▪The recovery plan involves re-collateralizing rsETH with committed ETH and adjusting valuations to safely unwind bad loans.
- ▪The proposal could recover around 13,000 ETH from Aave alone to help close the $300 million shortfall.
- ▪Execution requires multi-chain governance approvals and careful coordination to avoid further market disruption.
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TechShareShare this articleCopy linkX iconX (Twitter)LinkedInFacebookEmailA crypto coalition releases technical proposal to save Aave users from a massive token exploitDeFi United, a coalition of multiple blockchain projects and crypto ecosystem individuals, has laid out a detailed plan to restore the backing of rsETH after this month’s Kelp DAO hack sent shockwaves through lending markets.By Margaux Nijkerk|Edited by Aoyon Ashraf Apr 28, 2026, 3:43 p.m. Make preferred on What to know: DeFi United has proposed a coordinated plan to fix the fallout from a Kelp DAO exploit that created 116,500 unbacked rsETH, using Aave to help stabilize markets and recover funds.The plan involves restoring rsETH’s backing with fresh ETH while systematically unwinding bad loans tied to the exploit, aiming…
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