DeFi United Raises Over $300M to Restore Ecosystem After Kelp Exploit
The DeFi United initiative has accumulated over 132,704 ETH ($302M) to recover from the Kelp protocol hack, fully covering the $290M in damages.
The DeFi United initiative has amassed 132,704 ETH — over $302 million — to address the fallout from the Kelp protocol exploit. The total raised now exceeds the estimated $290 million in damages caused by the attack.
Major Contributors to the Recovery Fund
The largest donations came from Mantle (30,000 ETH) and Aave DAO (25,000 ETH). An additional ~30,700 ETH was recovered through the freezing of stolen assets on the Arbitrum network.
Aave founder Stani Kulechov personally contributed 5,000 ETH. Ether.fi and Lido Finance donated 5,000 ETH and 2,500 ETH respectively, with further contributions coming from community members.
On April 27, ConsenSys and its founder Joseph Lubin joined the effort, pledging up to 30,000 ETH.
"Consensys is proud to join DeFi United alongside @aave with up to 30,000 ETH to support the rsETH recovery. The Ethereum ecosystem has always been at its best when it moves as one." — Consensys.eth (@Consensys), original post
SharpLink's Ethereum treasury, with ConsenSys backing, will provide strategic advisory services to Aave. Compound has also signaled readiness to contribute up to 3,000 ETH, pending a governance vote.
"A proposal for Compound to support DeFi United's coordinated rsETH recovery effort with a contribution of up to 3,000 ETH is now live. While Compound's direct exposure is expected to be limited, the proposal reflects a broader commitment to supporting the integrity of DeFi…" — Compound Foundation (@Compound_xyz), original post
The Avalanche Foundation backed the initiative as well. The Renzo team provided over $10 million in liquidity to Aave V3 stablecoin markets.
Why This Matters
The Kelp exploit ranks among the largest DeFi security incidents and triggered a significant outflow of capital from the sector. The coordinated response from dozens of protocols, foundations, and individuals underscores the Ethereum ecosystem's capacity for collective crisis management. However, Andrew Mossa of Jefferies bank has previously warned that a string of DeFi hacks could dampen Wall Street's appetite for blockchain technology.
Technical Plan for rsETH Collateral Restoration
Aave's team has published a detailed technical roadmap for restoring rsETH collateral. The immediate priority is replenishing the affected lockbox to bring rsETH back to its original peg of 1.07 ETH.
Aave (@aave) shared the recovery plan — original post
The plan calls for forced liquidation of the hacker's positions on Aave and Compound, which should recover approximately 13,000 ETH. Separate governance votes will be required for each network. The rsETH oracle price will be temporarily adjusted, and the resulting tokens will be transferred to DeFi United's multi-signature wallet.
Once collateral is restored, the oracle will revert to normal pricing. The rsETH tokens will be redeemed for ETH through Kelp's standard redemption process, and the proceeds will be used to cover deficits across Aave markets on Ethereum and Arbitrum.
The attacker's position on Compound will be handled similarly: DeFi United will supply liquidity to recover roughly 16,776 ETH. During this process, WETH and rsETH reserves across Ethereum, Arbitrum, Base, Mantle, and Linea will remain frozen.
Victims of the Kelp exploit can now check their compensation amounts on the Recovery Fund website, with payouts scheduled to begin on April 30.
"rsETH Exploit victims now have the capability of viewing their compensation through the Recovery Fund website. The Payout process begins on April 30th." — Aavvc (@aavces_), original post
Outflows Begin to Stabilize
Capital outflows from DeFi have slowed as stabilization measures take effect. The sector's total TVL stands at $83.3 billion at the time of writing — still well below the pre-exploit level, which exceeded $99 billion.
Aave mirrors this trend: the protocol's TVL sits at approximately $14.1 billion, having shed $12 billion over the past 10 days.
Frequently Asked Questions
How much has DeFi United raised after the Kelp hack?
DeFi United has raised over 132,704 ETH, equivalent to more than $302 million. This fully covers the estimated $290 million in damages caused by the exploit.
Who are the biggest donors to the DeFi United recovery fund?
The largest contributors are Mantle (30,000 ETH), ConsenSys (up to 30,000 ETH), and Aave DAO (25,000 ETH). Aave founder Stani Kulechov personally donated 5,000 ETH.
When will Kelp exploit victims receive compensation?
Payouts to victims of the rsETH exploit are scheduled to begin on April 30, 2026. Affected users can already view their compensation amounts through the Recovery Fund website.
What happened to DeFi TVL after the Kelp exploit?
DeFi sector TVL dropped significantly from over $99 billion pre-exploit to $83.3 billion. Aave's TVL alone fell by $12 billion in 10 days, settling at approximately $14.1 billion.
What is the plan to restore the rsETH peg?
The Aave team plans to replenish the affected lockbox to restore rsETH's peg to 1.07 ETH. The hacker's positions on Aave and Compound will be forcibly liquidated to recover approximately 13,000 ETH, with separate governance votes required for each network.
Read also
TON Wallet Introduces Yield Vaults for BTC, ETH, and USDT Directly in Telegram
TON Wallet has launched yield vaults for BTC, ETH, and USDT directly within Telegram, offering up to 18% APY on stablecoins through partnerships with Morpho, TAC, and Re7.
Weekly Recap: Aave Ecosystem Rescue Mobilizes 100,000 ETH and Quantum Computer Cracks 15-Bit ECC Key
Bitcoin held near $78,000, the DeFi community rallied over 100,000 ETH to help Aave recover from the Kelp hack, and a researcher cracked a 15-bit ECC key on a quantum computer.
Bitcoin Down 2.5% Weekly: Jane Street Accusations & 7 Ethereum Forks
Bitcoin lost ~2.5% over the week amid macro shocks and geopolitical tensions. Jane Street faced market manipulation allegations while Ethereum unveiled an ambitious seven hard fork roadmap through 2029.
AI Audit Uncovers Critical Liveness Bug in Ethereum's Nethermind Client
Octane Security's AI discovered a high-severity vulnerability in the Nethermind execution client that could have halted block production for 38% of Ethereum mainnet validators. The Ethereum Foundation awarded a maximum $50,000 bounty.
Bitcoin Hits $70,000 as Iran Ceasefire Talks Boost Risk Appetite
Bitcoin surged 4% to test the $70,000 level on April 6 amid reports of ceasefire negotiations between the US, Israel, and Iran. The derivatives market, however, sends mixed signals.
Bitcoin Rebounds to $70,000 as Leverage Drops and ETF Inflows Continue
BTC recovered above $70,000 on March 10, erasing weekend losses. Spot ETFs attracted $568M in weekly inflows while the estimated leverage ratio on Binance fell sharply from 0.198 to 0.152.