Aave freezes $292M rsETH across networks after KelpDAO bridge hack
Aave has frozen $292M worth of rsETH reserves across Ethereum mainnet, Arbitrum, Base, Mantle and Linea after the April KelpDAO cross-chain bridge exploit. The hack allegedly drained 116,500 rsETH (about $292M), spreading a deficit into rsETH-linked lending markets and other DeFi products.
To limit further exposure while recovery runs, Aave said it is proceeding via coordinated governance commitments. Lido proposed a one-time capped contribution of up to 2,500 stETH from its treasury to reduce the rsETH shortfall. EtherFi’s governance vote approved allocating up to 5,000 ETH from its DAO treasury to compensate users and help stabilize debt on Aave and other platforms exposed to the assets. Any unused ETH would be returned to the treasury, with later recoveries handled under the same mechanism. Ethena also pledged support to help restore rsETH credibility and work toward a sustainable resolution.
Reportedly, around 1,800 participants backed the $RS-ETH rescue unanimously. A detailed recovery roadmap is expected within 7 days, and Aave plans frequent updates as execution approaches.
Neutral
The immediate freeze of rsETH reserves is a risk-control step that can limit further contagion into lending, which may reduce panic and stabilize expectations. On the other hand, the need for multi-protocol remediation, the size of the alleged deficit, and the complexity/timing of governance approvals typically keep short-term uncertainty elevated for rsETH holders.
So the net effect on rsETH price dynamics is more about sentiment and credibility management than a direct fundamental improvement. In the short term, traders may see volatility around governance outcomes and the 7-day roadmap timeline; in the long term, successful execution and recovery mechanics could support confidence, but any delays or incomplete restoration would pressure the asset again.