DeFi United Coalition Releases Technical Proposal to Restore rsETH Backing After Kelp DAO Exploit

Apr 28, 2026

Following a $290 million Kelp DAO exploit that created 116,500 unbacked rsETH tokens and rippled across Aave lending markets, a coalition of major DeFi protocols has raised approximately $303 million in commitments to restore full backing and eliminate bad debt. The DeFi United coalition, coordinated by Aave's Stani Kulechov with participation from Compound, Consensys, Lido, and others, represents one of the most coordinated industry responses to a DeFi incident. Major pledges include up to 250,000 ETH from Aave DAO, 30,000 ETH from Consensys and Joseph Lubin, and 30,000 ETH in credit facilities from Mantle, though much of the capital remains pending governance approval as of April 27, 2026. The technical plan proposes restoring rsETH backing with fresh ETH while systematically unwinding bad loans, with Aave Labs also seeking Arbitrum governance approval to release approximately 30,765.67 ETH immobilized by the network's Security Council.

Coordinated Industry Response and Fundraising Efforts

▪Much of the capital committed to DeFi United remains pending governance approval as of April 27, 2026.
▪The DeFi United recovery effort raised approximately $303 million in commitments as of Monday, April 27, 2026.
▪Stani Kulechov reached out to Consensys and other ecosystem participants following the April 18 bridge hack that impacted rsETH.

Major Contributors and Commitment Structures

▪Babylon Foundation plans to deposit $3 million in USDT into Aave as part of the recovery effort.
▪Renzo supplied more than $10 million from its treasury to Aave as part of the recovery effort.
▪Aave DAO proposed allocating up to 250,000 ETH as part of the DeFi United recovery effort.
▪BGD Labs' Ernesto Boado committed 100 ETH to the DeFi United recovery effort.
▪Consensys and Joseph Lubin committed up to 30,000 ETH in financial support to the DeFi United recovery effort.
▪KPK's Marcelo Ruiz de Orlano committed 100 ETH to the DeFi United recovery effort.
▪Aave's Emilio Frangella committed 500 ETH to the DeFi United recovery effort.
▪Lido put forward a proposal to allocate up to 2,500 stETH to the DeFi United recovery effort.
▪Stani Kulechov indicated he would personally donate 5,000 ETH to the DeFi United recovery effort.

Technical Recovery Proposal and Governance Process

▪Several DeFi United proposals remain under discussion as of April 27, 2026.
▪Aave Labs proposed asking Arbitrum governance to approve the release of approximately 30,765.67 ETH immobilized by the network's Security Council.