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DeFi United Releases Plan to Restore rsETH Backing After Kelp DAO Exploit Created 116,500 Unbacked Tokens
DeFi United, a coalition of blockchain projects and crypto individuals, has proposed a detailed plan to re-collateralize rsETH following a hack on Kelp DAO that generated 116,500 unbacked tokens. The plan involves injecting fresh ETH and unwinding bad loans on platforms like Aave and Compound. It aims to stabilize affected DeFi lending markets and resume normal operations.
Apr 28, 11:43 AM·1m read1 source
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DeFi United released a detailed plan to restore the backing of rsETH, CoinDesk reported. The coalition, comprising multiple blockchain projects and crypto ecosystem individuals, aims to address the fallout from a Kelp DAO hack that occurred this month and sent shockwaves through DeFi lending markets.
An attacker exploited a vulnerability in rsETH’s bridge on April 18, 2026, forging a message that appeared legitimate and tricking the Ethereum side of the system into releasing 116,500 rsETH.
The exploit created 116,500 unbacked rsETH tokens, which were spread across multiple wallets. A significant portion of the unbacked rsETH was used as collateral on Aave and other lending platforms. Roughly 107,000 of the original 116,500 rsETH remain tied up in active positions across Aave and Compound, according to the DeFi United proposal.
DeFi United has lined up enough ETH commitments to fully re-collateralize rsETH, the proposal stated. The plan involves restoring rsETH’s backing with fresh ETH and systematically unwinding bad loans tied to the exploit. The proposal aims to fully rebalance the system and resume normal operations.
The unwind process could free up around 13,000 ETH from Aave, according to the DeFi United proposal. The proposal was circulated on Aave’s official X account, CoinDesk reported.
