Summary
- Aave said a governance proposal had been submitted to provide 25,000 ETH to help address the bad debt created by fallout from the Kelp DAO hack.
- The total bad debt generated by the incident stands at 75,081 ETH, and 69,576 ETH in loans and donation support has been pledged so far.
- Once additional support funds from several crypto projects are added, the entire bad-debt amount could be fully resolved.
Forecast Trend Report by Period
Aave, the decentralized-finance lending platform hit by fallout from Kelp DAO’s major hack, is moving to deploy 25,000 Ether to help clean up bad debt.
Aave said on April 24 in a post on X that Aave DAO service providers had submitted a governance proposal to allocate 25,000 ETH to the “DeFi United” initiative. The funds will be used to restore the collateral value of rsETH and stabilize market conditions.
Kelp DAO previously suffered losses of about $292 million, or 116,500 rsETH, in a cross-chain bridge hack. The attackers minted large amounts of counterfeit rsETH, a restaked Ether token, without backing, deposited it on Aave as collateral, and borrowed legitimate crypto assets before making off with them.
The incident left Aave grappling with a severe liquidity crunch and a large amount of bad debt. Its total value locked also dropped sharply, falling below $30 billion.
A broader cleanup now appears close. According to on-chain analyst EmberCN, total bad debt from the incident stands at 75,081 ETH. Through DeFi United, which Aave is leading and coordinating, loans and donations totaling 69,576 ETH have been pledged so far. That leaves a gap of 5,505 ETH.
Several crypto projects, including LayerZero’s ZRO, have also confirmed additional support and are discussing the size of their contributions. With those funds added, the full bad-debt overhang could be eliminated.
Doohyun Hwang
cow5361@bloomingbit.ioKEEP CALM AND HODL🍀
