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Major DeFi protocols outlined technical steps to eliminate bad debt and restore full backing for exploited rsETH tokens.

Consensys and Joseph Lubin will commit up to 30,000 ETH to DeFi United’s rsETH recovery stack.The support is pivotal to repairing collateral damage from Kelp DAO’s $293 million exploit.Aave has warned that, without this backing, the recovery “would be difficult to advance.”

Aave and Kelp want Arbitrum DAO to release 30,765 ETH for rsETH recovery efforts.The funds would move to a Gnosis Safe managed by Aave, Kelp and Certora.Some Arbitrum delegates warned that the 49-day governance process may delay urgent recovery plans.

Aave Labs and four co-author protocols filed a proposal on Saturday morning seeking the release of 30,765.67 ETH that the Arbitrum Security Council froze in connection with the April 18 Kelp DAO exploit.The funds would be earmarked for DeFi United, the cross-protocol effort to restore rsETH’s backing.The standard Constitutional AIP lifecycle runs roughly 49 days from forum publication to onchain execution, a timeline some delegates have said is too long.

Mantle published a proposal to lend up to 30,000 ETH to Aave DAO to address bad debt stemming from last week’s Kelp DAO exploit.The Mantle team wrote that the loan would generate yield and strengthen the relationship between Mantle and Aave.

Kelp DAO has countered LayerZero’s earlier statement, saying the 1-of-1 DVN setup under criticism was shipped as the default at LayerZero.Aave released a new report evaluating two potential bad debt scenarios resulting from the $292 million exploit on Kelp.

The first scenario is far cheaper but runs the risk of rsETH depegging an estimated 15%, while the second is costlier but better protects Ethereum mainnet and concentrates losses at the layer 2 level.

LayerZero said North Korean hacker group Lazarus is likely responsible for the $292 million Kelp DAO exploit.The April 18 Kelp DAO exploit has triggered a $10 billion outflow from Aave due to concerns over potential bad debt on the protocol.The total value locked across the DeFi sector fell 7% in the past 24 hours to $86 billion.

LayerZero said Lazarus likely led the Kelp DAO exploit that drained 116,500 rsETH worth $292 million.LayerZero blamed Kelp DAO’s single-DVN setup, saying no backup verifier blocked the forged cross-chain message.The exploit triggered over $10 billion in Aave outflows and a wider DeFi TVL drop.

One of the largest decentralized finance (DeFi) exploits of 2026 took place on Saturday..

A Bank of Canada staff paper found Aave V3 avoided bad debt in 2024, but said the model pushed losses onto borrowers during liquidations.