Aave states that recovered collateral from the rsETH liquidation was moved to the Recovery Guardian for the restoration process after action across two blockchain networks.
Aave said it liquidated an attacker’s rsETH positions on Ethereum and Arbitrum, two blockchain networks used by the lending protocol. The recovered collateral has been transferred to the Recovery Guardian, an entity handling the restoration process. Liquidation in decentralized finance, or DeFi (blockchain-based financial services), typically occurs when collateral is seized to cover debt or risk exposure, making this step important for fund recovery and protocol stability.