DeFi United Raises 132,000 ETH to Cover Kelp DAO Exploit Losses

DeFi United said it raised more than 132,000 ETH, valued at over $300 million, to cover bad debt tied to the reported April 18 KelpDAO exploit involving unbacked rsETH allegedly minted through a LayerZero-related weakness and used as collateral on Aave, Compound and Euler to borrow roughly $292 million in ETH and other assets. The incident reportedly drove severe stress in Aave’s markets, with WETH utilization reaching 100%, contributed to a 17% decline in DeFi total value locked, and led to more than $12 billion in outflows from Aave, according to Oak Research. Aave founder Stani said the funds raised so far are sufficient to fully cover the rsETH shortfall, but final recovery still depends on a pending vote, an indicative agreement and successful execution. The broader response includes Solana Foundation lending USDT into Aave, Avalanche Foundation backing DeFi United’s collateral restoration effort, and support from backers including Circle Ventures, Consensys and Joseph Lubin, with Consensys and Lubin together providing 30,000 ETH.