DeFi United Moves to Restore rsETH Backing After $292M Exploit
DeFi United, a recovery coalition tied to Aave (AAVE), has detailed its plan to restore backing for rsETH after the April 18 exploit of Kelp DAO‘s cross-chain bridge. The attack released 116,500 rsETH—worth $292 million at the time—without proper burning on the source chain, creating a backing shortfall. The group’s technical roadmap proposes converting committed ETH into rsETH and depositing it into the affected bridge lockbox, enabling the bridge to resume operations. The Kelp exploit, attributed to North Korea‘s Lazarus Group, exploited a security flaw in Kelp’s single-verifier bridge design. The drained rsETH was later used as collateral on platforms like Aave and Compound, generating systemic bad debt. As of now, seven attacker-linked addresses still hold 107,000 rsETH-backed positions. To recover these funds, DeFi United plans to adjust the rsETH oracle price temporarily, liquidate exploiter positions in a controlled manner, and redeem the rsETH for ETH. The recovered ETH will be used to clear deficits in affected protocols. However, the plans success hinges on governance approvals, DAO votes, and the attacker not interfering with the liquidation process. Ethereum Community Rallies Behind Recovery Key Ethereum ecosystem players have stepped in to support the recovery effort. Consensys and its co-founder Joe Lubin have committed up to