A collective effort initiated by DeFi United, led by Aave’s founder Stani Kulechov, has successfully amassed 132,650 Ethereum (ETH) in response to the recent $290 million hack of Kelp DAO. As reported on Monday, this total is valued at approximately $303 million given Ethereum’s price around $2,300.
The primary goal of DeFi United is to replenish rsETH tokens stolen during the April 18 incident when attackers exploited Aave by borrowing vast sums using these unbacked funds, causing a significant strain on its liquidity and shaking confidence in decentralized finance (DeFi).
Contributions have been steadily flowing into the fund. On Monday, Consensys, an Ethereum-focused development firm, announced via Xpost that it contributed 30,000 ETH. Additionally, the Avalanche Foundation expressed support for the relief initiative through an Xpost. (Note: Consensys is among the investors in Decrypt.)
Despite gathering sufficient funds to counterbalance the rsETH value taken by North Korean-linked attackers, the overall amount raised depends on pending governance votes from other DeFi entities like Mantle, Ether.Fi, and Lido.
DeFi United has outlined that their strategy’s success is not assured, as it hinges on various components including tokenholders’ ability across different projects to unify around a shared objective. For instance, Arbitrum’s security council has frozen 30,765 ETH left exposed by attackers, with a proposal estimating the contribution process could take about 49 days.
Simultaneously, efforts are underway to alleviate Aave’s liquidity issues from other angles. Tron founder Justin Sun mentioned on Monday via Xpost that Tron DAO and HTX have injected $20 million in Tether’s USDT stablecoin into Aave’s platform.
During the hack, attackers converted rsETH into Ethereum, locking depositors’ assets. Affected parties turned to stablecoins like USDT and Circle’s USDC as a withdrawal method from the lending platform. As of Monday, these related markets showed a utilization rate near 92%, according to AaveScan, indicating a slight easing in the liquidity crunch compared to last week’s peak at around 100%.