Aave-led coalition DeFi United has unveiled a technical plan to restore backing for rsETH tokens and eliminate bad debt from the recent Kelp DAO hack.
The recovery strategy involves converting committed ETH into rsETH and then liquidating attacker positions through adjusted oracle prices.
The coalition has secured over $300 million in ETH commitments to address the fallout. Major players like Consensys and Joseph Lubin have pledged significant ETH contributions, with Aave Labs CEO Stani Kulechov also making a personal commitment.
This effort aims to recover ETH from affected markets on Aave's Ethereum and Arbitrum platforms, as well as Compound. The hackers had previously used unbacked rsETH as collateral to borrow significant amounts of WETH and wstETH.
The Arbitrum Security Council has already frozen millions in Ethereum linked to the exploiter's addresses.
This coordinated recovery effort addresses losses from the April 18 Kelp DAO hack, where North Korean attackers stole approximately $293 million by exploiting the protocol.