Mantle tokenholders have approved a proposal authorizing a credit facility of up to 30,000 Ether (ETH), worth approximately $68 million, for Aave DAO. The measure, MIP-34, passed in a seven-day Snapshot vote ending Friday.
The facility is intended to help address the impact of the April rsETH exploit on Aave V3. In the incident, an attacker deposited 89,567 unbacked rsETH on Aave and borrowed about $190 million in WETH, wstETH and stablecoins, creating potential bad debt estimated between $123.7 million and $230.1 million.
The Mantle Foundation will negotiate and execute definitive agreements with Aave DAO for the loan from the Mantle Treasury. The facility remains subject to Aave implementing its recovery plan and finalizing terms.
The rsETH exploit pushed Aave's Wrapped Ether (WETH) market into a prolonged squeeze. Galaxy Research reported that WETH utilization stayed above 99% for 12.7 days after the incident. High utilization means most supplied assets have been borrowed, leaving little idle liquidity.
The market has since cooled. Aavescan data shows the Ethereum V3 WETH market at about 91.6% utilization, with roughly 2.02 million WETH supplied and 1.85 million WETH borrowed.