DeFi United Coalition Raises $300M to Cover Aave Liquidity Gap After KelpDAO Exploit

Key Facts

Compound protocol has unveiled joint technical plans with Aave to address the Kelp DAO hack, even as Aave's lending operations ground to a halt following the exploit. This operational paralysis adds a new layer of challenge to the recovery efforts, despite Aave DAO's approval to allocate 25,000 ETH from its treasury. These internal funds complement the DeFi United coalition's success in mobilizing over $300 million to bridge the $293 million liquidity gap. Aave founder Stani Kulechov is focusing on restoring rsETH backing to 1.07 ETH and clearing debt positions to restart the protocol's core functions. The recovery is further bolstered by strategic support from Circle Ventures, aiming to restore investor trust shaken by the service disruption. Analysts emphasize that while the halt is significant, the coordinated cross-protocol response remains a vital step in decentralized crisis management.