The Solana Foundation has deployed Tether (USDT) from its treasury into the Aave protocol for the first time. This move aims to support recovery efforts following a recent exploit.
Lily Liu, chair of the Solana Foundation, stated that the treasury is used to foster the Solana economy and that the health of decentralized finance (DeFi) across all blockchains is crucial for Solana's own prosperity.
The Foundation also announced plans to introduce Aave's governance token, AAVE, to the Solana blockchain this weekend.
The exploit targeted Aave by enabling attackers to mint unbacked rsETH tokens through a misconfiguration in LayerZero's verification system. These tokens were then used as collateral to withdraw approximately $190 million in assets, creating significant bad debt exposure within the Aave protocol.