Kelp Fully Restores rsETH Token Collateral

Kelp has successfully restored the collateral for its rsETH token, five weeks following a significant hack that caused a liquidity crisis in the decentralized finance (DeFi) ecosystem. The final batch of 20,373 rsETH was transferred to the LayerZero smart contract, marking a crucial step in the recovery process.

Today, we sent the final amount of 20,373.72 rsETH to the rsETH OFT adapter, concluding the rsETH recovery operation.

— Kelp (@KelpDAO) May 25, 2026

This recovery comes after attackers exploited the protocol, utilizing the stolen 116,500 rsETH as collateral on the Aave platform, which led to the generation of approximately $190 million in "bad debt" and prompted massive withdrawals from the lending platform.

Efforts to recover funds involved the DeFi United initiative, which helped to raise resources for Kelp's recovery plan. The first restoration tranche of 25,000 rsETH was completed on May 13, allowing the reopening of cross-chain bridges between the Ethereum mainnet and its Layer 2 solutions, with subsequent withdrawals enabled the following day.

The fallout from the Kelp hack also contributed to a notable decline in total value locked in Aave, decreasing from $26.3 billion to $17.7 billion. Additionally, April was particularly harsh for the crypto sector, witnessing over 20 hacking incidents that collectively resulted in around $651 million in losses. Other projects, such as Ekubo and THORChain, were also victims of attacks in May.