Aave collaborates with DeFi platforms to recover from a recent attack on Kelp, launching the DeFi United initiative to restore confidence and funds.
Aave, a prominent lending protocol, is collaborating with various DeFi platforms to recover from a recent security breach impacting the Kelp project. This initiative, dubbed DeFi United, aims to stabilize the ecosystem and restore confidence among users.
The incident on April 18 affected the backing of the rsETH token, prompting a collective response from the DeFi community. Aave service providers are spearheading efforts to ensure the token's support is reinstated. They emphasized the importance of collaboration during crises, stating, "We believe ecosystem collaboration matters most in moments like this, and our priority is achieving the strongest possible available outcome for users."
To address the shortfall, Lido has proposed allocating up to 2,500 stETH, worth approximately $5.8 million, while the EtherFi Foundation is set to contribute 5,000 ETH, roughly $11.5 million. Aave's CEO, Stani Kulechov, also pledged a personal contribution of 5,000 ETH to the relief effort, highlighting his commitment to the protocol and its users.
Moreover, the Golem Foundation has allocated 1,000 ETH, and the Mantle team is considering offering a loan of 30,000 ETH over three years to support Aave's recovery initiatives. Other participants in the DeFi United initiative include Ethena, LayerZero, Ink Foundation, Tydro, and Frax Finance.
In terms of performance, Aave's total value locked (TVL) has significantly dropped to $14 billion from over $26 billion before the attack. The platform has seen a $17.2 billion decrease in deposit volume, now totaling $28.6 billion. However, analysts noted that the outflow of funds appears to have halted since the DeFi United initiative was launched.
Following these developments, the AAVE token experienced a nearly 2% increase, trading around $93.3. The community has rallied behind the unification of DeFi projects, with many expressing pride in the collective action taken to address the crisis. Earlier, on April 21, the Arbitrum security council had frozen over 30,766 ETH, valued at approximately $71.2 million, that was stolen during the attack.
