The DeFi United initiative has raised over $300 million to assist in recovery from the Kelp hack, covering most of the damages incurred.
The DeFi United initiative has successfully raised over 132,704 ETH, equivalent to more than $302 million, to aid in the recovery efforts following the recent Kelp hack, which inflicted around $290 million in damages.
Significant contributions came from major players like Mantle, which donated 30,000 ETH, and the Aave DAO with a contribution of 25,000 ETH. Moreover, around 30,700 ETH was reclaimed by freezing assets that had been stolen on the Arbitrum platform.
Aave founder Stani Kulechov personally contributed 5,000 ETH. Other notable donations included 5,000 ETH from Ether.fi and 2,500 ETH from Lido Finance, alongside several community member contributions.
On April 27, ConsenSys and its founder Joseph Lubin joined the fundraising campaign, pledging an additional 30,000 ETH, highlighting the collaborative spirit within the Ethereum ecosystem. Lubin stated, "The Ethereum ecosystem has always been at its best when it moves as one."
Additionally, the Avalanche Foundation has added its support, alongside the Renzo project team, which provided over $10 million in liquidity to Aave's V3 stablecoin markets.
Strategy for Recovering rsETH Collateral
Aave developers have outlined a strategy for recovering collateral linked to rsETH. The initial effort will focus on restoring the affected lockbox to bring the token back to its original value of 1.07 ETH.
Plans include liquidating positions held by the hacker on Aave and Compound, which is anticipated to yield approximately 13,000 ETH. Adjustments to the oracle price of rsETH will be made temporarily, with tokens transferred to a DeFi United multisig wallet after recovery.
The recovery effort will also involve a similar strategy for Compound, where DeFi United is prepared to provide liquidity to recover around 16,776 ETH. During this process, reserves of WETH and rsETH across multiple chains will be frozen.
Aave announced that starting April 30, victims of the Kelp hack can check their compensation amounts through the Recovery Fund website.
Impact on DeFi Outflows
Following these stabilization efforts, outflows from the DeFi sector have slowed down, with the total value locked (TVL) currently at $83.3 billion, still below the pre-hack level of over $99 billion. Aave's TVL stands at about $14.1 billion, reflecting a significant drop of $12 billion over the past ten days.
Industry analysts suggest that ongoing hacks could deter institutional interest from Wall Street in blockchain technologies.
