In the fragmented realm of decentralized finance, crises often highlight vulnerabilities. This instance has also unveiled an unprecedented level of collaboration.
Aave, a leading DeFi lending protocol, is now at the heart of a significant recovery effort after suffering from losses due to the Kelp DAO exploit. This initiative, known informally as ‘DeFi United,’ has amassed around $303 million in commitments by Monday, according to its website, though much of this capital awaits governance approval.
The incident, which affected rsETH markets and posed risks across Aave’s lending positions, is prompting one of the most synchronized responses from the industry to a DeFi crisis.
“There’s a shared priority around supporting users and restoring normal market conditions,” stated an Aave Labs spokesperson. “Many participants are integral to DeFi through infrastructure, capital, or user access, and have a vested interest in ensuring markets operate smoothly.”
Central to the effort is Aave itself. A governance proposal suggests that the DAO might allocate up to 250,000 ETH for recovery purposes. Additionally, founder Stani Kulechov has pledged to donate 5,000 ETH personally. Other key contributors from within Aave’s network include Emilio Frangella (500 ETH), Ernesto Boado from BGD Labs (100 ETH), BGD Labs itself (250 ETH), and Marcelo Ruiz de Orlano from KPK (100 ETH).
However, the response has expanded beyond Aave, often initiated through direct outreach. Following the April 18 bridge hack affecting rsETH, Kulechov contacted Consensys and other ecosystem players to coordinate a response, as per a Consensys spokesperson.
The company, along with its founder Joseph Lubin, committed up to 30,000 ETH for financial support to advance recovery efforts and safeguard users. Sharplink offered strategic advice during these discussions, the spokesperson added.
“The Ethereum ecosystem thrives when it unites,” Lubin remarked in a statement. “DeFi United epitomizes this unity—a comprehensive response to protect users and fortify our shared infrastructure. Consensys is honored to contribute alongside other ecosystem stewards.”
Smaller contributions have also emerged from various community members.
Lido proposed allocating up to 2,500 stETH, while EtherFi is considering a plan for 5,000 ETH aimed at supporting users and limiting bad debt across DeFi. Mantle suggested a 30,000 ETH credit facility loan to bolster backstop liquidity. Compound also submitted a proposal offering up to 3,000 ETH.
Some contributions involve deposits into Aave itself. Babylon Foundation plans to deposit $3 million in USDT, while Renzo has contributed over $10 million from its treasury. Circle Ventures is acquiring AAVE tokens, with additional deposits from Avalanche Foundation, Solana Foundation, and Justin Sun, according to Aave Labs.
The list of participants continues to grow, including Ethena, LayerZero, Frax Finance, and Ink Foundation, along with Tyro, though they have not disclosed their commitment sizes.
“These are long-standing relationships within the Aave ecosystem,” added the Aave Labs spokesperson. “Teams like Consensys and Sharplink have maintained close contact throughout.”
Not all contributions are uniform; some provide grants, others deposits, while several extend credit lines, reflecting diverse strategies for balancing support with risk management.
Concurrently, Aave Labs proposed that Arbitrum governance approve the release of roughly 30,765.67 ETH held by the network’s Security Council into this coordinated effort, aiming to compensate affected rsETH holders and restore its backing.
While much capital is pending governance approval and proposals are still under discussion, the wide-ranging participation highlights the exploit’s extensive impact across DeFi.
“The Ethereum ecosystem excels in unity,” Lubin reiterated. “DeFi United exemplifies this collaboration—a broad response to protect users and reinforce our collective infrastructure.”