Lido Finance has put forth a proposal to allocate up to 2,500 stETH, valued at approximately $6 million, to address a significant shortfall in KelpDAO’s liquid restaking token, rsETH. This move is part of a coordinated DeFi recovery effort following a hack estimated at $290 million.
Aave initiated the ecosystem-wide response, dubbed “DeFi United,” to make affected users whole after an exploit on April 18 left rsETH underbacked and exposed funds across multiple lending markets. Lido’s contribution is contingent on the relief package being sufficient to cover the entire deficit, which is reported to exceed 100,000 ETH.
Lido’s involvement is critical due to its own product exposure; its EarnETH vault has direct exposure to rsETH. Without this coordinated support, losses for users in that vault could be substantial. Earlier, Aave paused rsETH reserves across multiple Ethereum and rollup environments to limit further risk.
The broader market has reacted severely to the exploit, with Aave reportedly experiencing around $9 billion in net outflows. Total value locked on the platform and across decentralized lending protocols has seen significant declines.