Aave raises nearly 80% of the $200 million it needs to cover bad debt left by Kelp DAO exploit

Finance Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email Aave raises nearly 80% of the $200 million it needs to cover bad debt left by Kelp DAO exploit Blockchain analytics platform Arkham said that the largest contributors are Mantle and Aave DAO, having raised a combined $127 million. By Olivier Acuna | Edited by Sheldon Reback Apr 26, 2026, 4:21 p.m. Make preferred on (Shutterstock) What to know : Aave has raised about $160 million of the roughly $200 million it needs to cover bad debt from the KelpDAO exploit, the year’s largest DeFi exploit. The DeFi United recovery effort, led by Aave service providers, aims to recapitalize and restore support for rsETH, the ether-based token at the center of the attack. Major contributors including Mantle, Aave DAO and Aave founder Stani Kulechov have collectively pledged tens of thousands of ether to stabilize the platform and broader DeFi markets. Lending platform Aave has raised about $160 million it needs to cover the $200 million in bad debt left behind by the year's largest decentralized finance (DeFi) exploit, Arkham posted on X on Saturday. "AAVE have so far raised $160M to cover the bad debt from the Kelp DAO Exploit, at defiunited.eth," the blockchain analytics platform wrote. "The largest contributors are Mantle and AAVE DAO, who together raised 55,000 ETH or $127M." Last week, Aave and several major crypto firms announced a coordinated recovery effort to stabilize DeFi markets after a $292 million security breach left the crypto borrowing sector's largest lender facing a financial crisis. Called DeFi United and led by Aave service providers, the effort’s goal is to restore support for rsETH, the yield-bearing derivative token of ether (ETH) at the core of the exploit. “I’m personally contributing 5,000 ETH to DeFi United as we continue working together with partners,” said Aave founder Stani Kulecho. His personal contribution at ether’s current price of roughly $2,346 is worth $11,730,000. The exploit is traced back to a KelpDAO integration vulnerability with LayerZero, where an attacker minted 116,500 unbacked rsETH tokens. That left Aave with impaired collateral, triggering a run on deposits as lenders rushed to exit, ultimately withdrawing $10 billion. The effort to erase the bad debt is focused mostly on stabilizing the system with a coordinated bailout to recapitalize rsETH and mitigate losses. The second-largest exploit this year took place late March, when an attacker drained at least $270 million from the Drift Protocol on Solana by abusing a legitimate feature called 'durable nonces,' rather than exploiting a code bug or stolen keys. DeFi Ethereum News Hack More For You Why DeFi isn't dead despite massive exploits and $13 billion investor exodus By Oliver Knight | Edited by Nikhilesh De 21 minutes ago A $292 million exploit and $13 billion TVL drop looks catastrophic on the surface, but the data tells a different story. What to know : KelpDAO's $292 million exploit triggered $13 billion in DeFi TVL losses, but much of that was leveraged positions unwinding — not real capital destruction. Spark TVL jumped from $1.8 billion to $2.9 billion over the weekend as users moved away from Aave. DeFi has survived larger hacks — Ronin, Wormhole,... Read full story Latest Crypto News Why DeFi isn't dead despite massive exploits and $13 billion investor exodus 21 minutes ago Bitcoin whales build long positions as funding stays deeply negative 2 hours ago Freezing 5.6 million dormant bitcoin could trigger ‘worst’ single-day repricing 2 hours ago Only 3% of traders drive prediction markets' accuracy, not the crowd, study finds 2 hours ago MiCA's not enough: Bybit CEO says firms need other licenses to turn a profit in Europe 3 hours ago Coinbase's John D’Agostino says crypto platform stands alone as industry's full-service prime broker 4 hours ago Top Stories Litecoin hit by denial-of-service attack, rewrites 13 blocks to reverse effect 7 hours ago Trump defends crypto legislation at private event featuring boxer Mike Tyson, Tether CEO 21 hours ago BlackRock’s bitcoin ETF just hit a massive milestone that proves crypto is now a mainstream bet 21 hours ago