ConsenSys and Ethereum co-founder Joseph Lubin have pledged 30,000 ETH to DeFi United, a multi-party effort to recover from an April 18 bridge exploit that created unbacked rsETH tokens.
"Strong DeFi infrastructure does not build itself," Circle Ventures said in a Monday statement, announcing its participation by purchasing AAVE tokens. "Aave is helping to shape the future of onchain finance, and we’re backing that ecosystem and the entire community built around it."
The recovery fund has now gathered over 132,000 ETH, worth more than $300 million, from a wide range of contributors. Aave's own DAO is voting on a 25,000 ETH allocation from its treasury. Other major DeFi protocols have also stepped in, with Ether.Fi proposing a contribution of up to 5,000 ETH and Lido DAO proposing up to 2,500 ETH.
The coordinated response aims to restore backing to the liquid restaked derivative rsETH and shore up confidence in the DeFi ecosystem after the exploit left the Aave protocol with over $177 million in bad debt. The success of this industry-led bailout could set a precedent for managing future large-scale security incidents and demonstrates a collective will to protect the integrity of decentralized finance.
The incident began on April 18 when an attacker exploited a compromised LayerZero bridge to mint approximately 116,500 unbacked rsETH tokens. These were then used as collateral on Aave to borrow other assets, leaving the lending protocol with significant bad debt.
In response, Aave service providers initiated DeFi United, a coordinated campaign to raise funds and restore rsETH's collateral backing. The effort has seen a groundswell of support from across the crypto industry. Besides the major pledges from ConsenSys and others, Arbitrum DAO has a pending vote to contribute 30,765 ETH, and Mantle is considering a 30,000 ETH commitment.
The list of contributors includes Kelp DAO, which pledged 2,000 ETH, and Aave's founder Stani Kulechov, who committed 5,000 ETH from his personal holdings. Dozens of other entities and individuals have also contributed, highlighting the decentralized and collaborative nature of the recovery. The Solana Foundation has also shown support by deploying treasury assets into Aave.
This article is for informational purposes only and does not constitute investment advice.
