DeFi Protocols Raise $161mn in rsETH Rescue Effort

More than 69,500 Ether (ETH) has been pledged so far, led by Mantle, an Ethereum scaling network, with a 30,000 ETH pledge. Other major contributors include 25,500 ETH from Aave DAO, 5,000 ETH each from Aave founder Stani Kulechov and the Ether.fi Foundation and up to 2,500 ETH from Lido, a liquid staking provider and the largest DeFi protocol by total value locked (TVL), according to the DeFi United dashboard.

The response shows how DeFi protocols are teaming up to limit losses, rather than letting positions be liquidated. It also highlights how widely used assets like liquid staking tokens can create broader risks when something goes wrong.

All hands on deck

Additional contributions include 1,000 ETH from the Golem Foundation, 500 ETH from Aave builder Emilio Frangella, and 350 ETH from BGD Labs and its co-founder Ernesto Boado. Further participation has been confirmed from LayerZero, Ethena, Ink and Frax Finance.

Support for the effort is also growing across the ecosystem. "When we got hacked, the industry got together and helped us. It is only right that we do the same," said Bybit CEO Ben Zhou, whose firm backs Mantle. Bybit, a Dubai-based centralized exchange (CEX), in February 2025 suffered the largest hack in crypto history, recording approximately $1.5bn in stolen digital assets.

On 18 Apr, Kelp DAO – a liquid restaking protocol with around $2bn in TVL – was exploited for around $292mn in rsETH. The attack targeted a LayerZero-powered cross-chain bridge, allowing attackers to drain about 152,600 rsETH, which was then used as collateral to borrow Wrapped Ether (wETH).

The exploit initially created a shortfall of about 163,000 ETH. Recovery efforts have since included asset freezes and expected liquidations across multiple platforms – including funds secured by Kelp, the Arbitrum Security Council and positions on Aave and Compound – according to an Aave governance proposal published Friday. These measures have helped reduce the remaining gap to around 75,000 ETH.

Ether hovered near $2,320 on Friday, down 0.45% on the day as of 19:53UTC.

Losses are going strong

The efforts come as April has already recorded more than $630mn in crypto losses from hacks, making it the worst month for exploits since March 2022, according to blockchain security firm CertiK.

April's losses have been heavily concentrated in just a handful of incidents, including the Kelp DAO exploit and the Drift Protocol hack, which together accounted for around $576mn in initial losses. 

The surge in exploits marks a sharp increase from March, when losses totaled about $59.5mn, and pushes total losses for the year to well above $1bn.