Arbitrum DAO votes to redirect Kelp hacker ETH to Aave-led DeFi United
Arbitrum DAO is voting on releasing 30.766 ETH—moved from the Kelp DAO attacker—into an Arbitrum One address tied to Aave-led DeFi United. The Arbitrum DAO vote gained strong momentum, with 16.9M ARB voting “yes” in the first hour and no “no” votes reported so far. The vote runs until May 7.
In response to the Kelp exploit, the Arbitrum Security Council locked about $71.1M worth of ETH using emergency powers approved by 9 of 12 members. The locked funds remain on an address that requires DAO approval to release, prompting debate over centralization—even as the council said its action followed law-enforcement direction to protect users.
The underlying incident involved a cross-chain withdrawal of about 18% of Kelp’s rsETH (roughly $292M). Funds were routed via Kelp’s bridge into lending venues such as Aave, Compound, and Euler, where assets were borrowed against as WETH and other tokens, creating an estimated $236M debt. Contracts were paused, and analysts flagged possible links to the Lazarus Group.
DeFi United has raised $311M+ in ETH and stablecoins. If the Arbitrum DAO vote passes, Arbitrum would be a major contributor, potentially improving sentiment around Aave-linked lending risk management. Traders may see short-term relief for ARB and related DeFi markets, but attention will remain on attacker attribution and residual risk.
Bullish
A successful Arbitrum DAO vote to redirect the Kelp hacker ETH into the Aave-led DeFi United plan reduces the probability that seized funds stay idle or create prolonged uncertainty. Strong early “yes” support and a clear redemption path can improve sentiment for ARB and spill over to Aave-linked DeFi risk perception. In the short term, traders may treat this as “damage control” and position for stabilization. However, the incident’s details—large debt creation, paused contracts, and disputed attribution—keep tail risk elevated, limiting how strongly price may react.