- On April 23, the Mantle Network released a formal proposal to provide a loan to a relief program called DeFi United, which is led by Aave.
- The purpose of this proposal is to manage the “bad debts” created after the Kelp DAO hack and fill the 100,000 ETH shortfall in the rsETH supply without imposing losses on ordinary depositors.
- Aave has already frozen rsETH reserves on Ethereum, Base, Mantle, and Linea, while Arbitrum’s security board has frozen more than 30,000 ETH of stolen funds.
Amid the disastrous situation in the DeFi sector, major protocols are coming together to minimize the damage caused by the Kelp DAO security breach. On April 23, the Mantle Network submitted a formal proposal to provide loan facilities for a coordinated relief program to be announced by Aave.
After the rsETH incident this week involving… @KelpDAO and @LayerZero_Corea proposal was made for Mantle to contribute to the loan facility @ghostCoordinated relief efforts.
The loan will form part of a broader coordinated framework, designed to reduce…
– Mantle (@Mantle_Official) April 24, 2026
This project is called DeFi United, which unites the DeFi sector to work on a payback model. The main purpose of this project is to increase support to support compromised assets and stabilize the lending markets that support the entire industry.
What is Mantel’s new proposal?
A key part of this proposal is to create a coordinated framework. This framework is designed to absorb the damage caused by rsETH unpegging.
in an offercloak MNT1.45% It proposed using its own treasury to provide liquidity support. This support will help Aave manage its ‘bad debts’. This bad debt was created when attackers used unbacked tokens as collateral.
By providing the loan, Mantle is offering its support to reduce market disruption. This will help them avoid sudden liquidations that could cause asset prices to fall further.
The proposal is part of a larger movement, as Mantle is not alone in raising support for it. For example, Lido Finance allocated $2,500 STETH to a dedicated relief fund.
DeFi United’s main goal is to close the 100,000 ETH deficit that is currently affecting the supply of rsETH. They also want to do this without placing the entire burden on users of a single protocol.
Aave is my life’s work and we work non-stop to find the best possible results for users.
I am personally contributing 5,000 ETH to DeFi United as we continue to work with partners to formalize more commitments. I am working on solving this problem and market conditions…
-Stani (@StaniKulichov) April 23, 2026
The founder of Aave himself has raised his support for this, saying: “I am personally contributing 5,000 ETH to DeFi United as we continue to work with partners to formalize more commitments. “I am working to resolve this issue and bring market conditions back to normal as soon as possible.”
As of now, several DeFi projects have already shown their support for the fight Liquidity Crisis, incl EtherFi Foundation, Ethena, LayerZero, Tydro, Ink Foundation, and Golem Foundation.
How the Kelp DAO rsETH exploit happened on April 18
The Kelp DAO incident occurred on April 18 after a highly sophisticated attack on the cross-chain infrastructure. The attackers targeted the so-called 1-of-1 validator configuration. This configuration was inside the LayerZero bridge adapter that was used for rsETH.
By compromising internal “Remote Procedure Call (RPC)” nodes combined with a DDoS attack against external data sources, attackers hijacked the protocol validator in the echo chamber.
This allowed hackers to feed the system with false data. The fake data showed that 116,500 rsETH was burned on the source chain. In fact, no such deal ever happened.
After that, the Ethereum mainnet node issued around $292 million worth of rsETH tokens, which have no backing at all. The attackers then transferred these fake tokens to Aave V3 marketplaces via Mantle, Arbitrum, and Ethereum.
They used these fake tokens as collateral to borrow around $190 million in real ETH and stablecoins. This trick led to the loss being transferred from Kelp DAO to Aave lending pools, leaving depositors in default.
Aave announces a relief project to stabilize the ecosystem
In response to the strange attack, Aave formed a collaboration between DeFi projects to provide relief in the ongoing catastrophic situation affecting tokens such as resolution. The purpose of DeFi United is to spread losses across treasury holdings and protocols. This means that they will not force ordinary individual depositors to bear losses.
Aave has already frozen rsETH reserves across Ethereum, Base, Mantle, and Linea. This will help them stop further spread of damage.
