Aave reopened the Ethereum, Arbitrum, Base, Linea, and Mantle rsETH markets on May 14, 2026, again allowing token withdrawals and operations after being frozen for about three weeks due to the Kelp DAO hack.
countermeasure Returns access to users who had funds or collateral locked in rsETH This comes after Aave, Kelp DAO, and other protocols complete the first phase of a recovery plan designed after the April 18 exploit.
In the past few weeks, advances have been made in both protocols. A recovery plan divided into several phases. In early May, Aave executed a liquidation of positions associated with the attackers and moved the recovered rsETH to wallets managed by Aave Recovery Guardian and Kelp Recovery Safe.
As part of the coordinated platform reboot, Kelp DAO has reactivated cross-network transfer and fund request functionality for rsETH users. The company further reported that the exchange rate will be updated on May 15th at approximately 4:30pm CET to incorporate all staking rewards accumulated during the suspension period, so token holders will be able to see their profits reflected in the updated asset value.
Subsequently, Kelp DAO confirmed the gradual replenishment of 117,132 rsETH to LayerZero’s OFT adapter, a mechanism used for token interoperability between networks. recovery There was also financial support from other actors in the ecosystem. Protocols such as Ether.fi, Lido, and Ethena have participated in informal recapitalizations to strengthen asset support and stabilize their systems following exploits.
The organization has also set up a special section on its website for users affected by the hack. As he explained, potential losses were automatically estimated by the system, so rsETH holders could receive compensation. To check eligibility, users must connect to their digital wallet.
As reported by CriptoNoticias, the attack stemmed from a vulnerability in the bridge. cross chain Kelp DAO built on LayerZero infrastructure. Attacker successfully minted 116,500 rsETH without backup and use them as collateral within Aave V3 to mine approximately $200 million in wETH, leaving the protocol exposed to large amounts of bad debt.
This incident resulted in a large-scale outflow of liquidity. Within hours, users withdrew more than $5.4 billion in ETH from Aave, with asset utilization reaching 100% and withdrawals temporarily blocked. As an emergency measure, Aave froze rsETH reserves on Ethereum on April 23rd Some second layer networks to avoid on-chain liquidation and contain systemic risks.
After the hack, it is worth noting that rsETH temporarily lost its expected peg It was trading below 0.86 ETH, reflecting market distrust in the security of the asset and cross-chain bridges. While rsETH is currently trading around 1.06 ETH and the Kelp DAO has ensured that the token is once again fully backed, this episode has reinvigorated the debate about the systemic risks that can arise from using restaked assets as collateral within lending protocols.
For users, reopening means funds are locked It will once again be available for withdrawal and closing of positions. But this episode also leaves an uncomfortable precedent for DeFi. Even protocols that are considered related within an ecosystem can be exposed to large-scale liquidity crises due to failures in their interconnected infrastructure. Normalization of rsETH Relieving immediate pressure on AaveHowever, the market is still evaluating how much damage this exploit has caused to trust in the industry.
