The decentralized finance sector, long accustomed to frequent crises, is now drawing attention with a broad show of solidarity in response to the recent Kelp DAO attack on Aave. Since the incident, participants from across the industry have pledged roughly $303 million in support. The majority of these committed funds await community approval before being deployed.
Central role of Aave in the rescue operation
As one of the largest lending protocols in the crypto ecosystem, Aave is at the heart of the response. Governance proposals put forward earmark up to 250,000 ETH for the recovery fund. Aave’s founder, Stani Kulechov, has personally pledged to donate 5,000 ETH. Key figures from Aave’s team, including Emilio Frangella, as well as Ernesto Boado and Marcelo Ruiz de Orlano from BGD Labs, are also preparing to contribute varying amounts of ETH.
Because the attack also triggered a cascade of risks in rsETH markets, the rescue plan has been designed with broad coverage. If approved, the initiative aims to compensate affected users and stabilize market conditions.
Broad ecosystem support and diverse models
The call for support around Aave quickly drew participation beyond the usual boundaries of the sector. Following the attack, it was reported that Stani Kulechov initiated direct talks with prominent players such as Consensys and others. Ethereum infrastructure firm Consensys, along with its founder Joseph Lubin, expressed readiness to provide 30,000 ETH in aid. In this process, Sharplink played an active role as advisor.
“DeFi United represents exactly the broad and coordinated response needed to protect users and strengthen the infrastructure we have built. We are pleased to stand alongside other ecosystem stakeholders in contributing to this effort.”
Other members of the community have also offered various forms of support. Lido proposed to allocate 2,500 stETH to the recovery, while EtherFi is discussing a plan to back users with 5,000 ETH. Mantle’s proposal includes a 30,000 ETH credit line, and Compound suggested contributing 3,000 ETH to the fund.
Contributions are not limited to ETH; support in USDT and other assets has also been pledged. The Babylon Foundation plans to deposit USDT worth $3 million into the Aave protocol, while Renzo has committed over $10 million from its treasury. Circle Ventures joined the process by purchasing AAVE tokens. Additional backing has come from Avalanche, the Solana Foundation, Justin Sun, and various crypto startups.
Approval process and support diversity
Support from participants has been organized using various models, including direct donations, deposits, and credit lines. Some institutions have offered outright grants, others provided credit facilities, and some opted to make protocol deposits. This diversified approach suggests a balance between risk management and solidarity.
Aave Labs has also proposed releasing about 30,765.67 ETH controlled by the Security Council on the Arbitrum network, to cover losses suffered by rsETH holders. However, a significant portion of the pledged funds remains pending governance approval.
With new stakeholders joining the initiative, the extensive impact on the decentralized finance ecosystem has become increasingly evident. The process is ongoing, and with each passing day, more contributors are helping expand the rescue fund.
