Decentralized lending protocol Aave announced today, May 17, 2026, that Recovery of loans secured by Wrapped Ether (wETH) In all version 3 (V3) implementations.
This measure is Overcoming the liquidity crisis caused by Kelp DAO abuse This will allow the wETH market to regain full functionality.
According to a statement released by Aave: loan-to-value ratio (LTV) ETH has recovered to pre-incident levels In the network: Ethereum Core, Ethereum Prime, Arbitrum, Base, Mantle y Linea.
With this update, Asset returns to normal behavior with Aaveremoving precautionary restrictions that were imposed to protect the ecosystem’s solvency.
Aave founder Stani Kulechov highlighted the progress through a public statement confirming the completion of this new step within the “rsETH Technology Recovery Plan.”
Kulechov emphasized that the normalization of LTV is essential for users, who will now “be able to apply for loans with wETH on Aave again, including guarantees and debt swaps.”
This technical move is a continuation of the reopening of the rsETH market. As reported by CriptoNoticias, it occurred on May 14th after several weeks of freezing.
Considering that wETH is one of the most used collateral pillars in decentralized finance (DeFi), restoring the creditworthiness of wETH is extremely important for the protocol.
The Aave community generally rates the speed of process management positively. Stable. Despite the magnitude of the initial event, users emphasized that the recovery schedule was achieved with higher efficiency than expected in the context of systemic stress.
The event revealed the systemic risks of decentralized finance beyond community support on social networks. AAVE governance token price shows market has not yet regained confidence:
At the time of publishing this article, AAVE is priced at $90.54, which is 22% lower than the price before the Kelp DAO hack.
