Aave Freezes rsETH Reserves Across Five Networks

Aave has frozen rsETH reserves on Ethereum Core, Arbitrum, Base, Mantle and Linea after an April 18 exploit of KelpDAO’s cross-chain bridge drained 116,500 rsETH, roughly $292 million. The freezes cover multiple networks where rsETH liquidity and lending exposure exist while protocols coordinate a recovery plan.

Aave’s service providers are leading a coordinated recovery effort to restore rsETH’s backing and limit the risk of bad debt on venues holding the affected asset. Several ecosystem participants have moved proposals through governance to commit capital to a relief vehicle that will be used only to reduce the rsETH shortfall.

A Lido governance proposal requests a one-time allocation of up to 2,500 stETH from the Lido Labs Foundation operational multisig. Proposed funds would be sent to a dedicated relief vehicle to sit alongside other contributions and be used exclusively to lower the rsETH deficit.

EtherFi’s DAO proposal authorizes deployment of up to 5,000 ETH from its treasury as part of the multi-protocol remediation program. The proposal specifies that remediation begins after DAO approval and continues until the cleanup is complete, the 5,000 ETH cap is reached, or a later vote alters the program. Any unused ETH would return to the treasury, and any value recovered later through restitution, insurance, legal action or on-chain recovery would also be returned up to the amount deployed. The vote recorded 1,800 participants, all in favor.

Ethena has joined the coordinated relief effort and said it will contribute toward restoring rsETH backing and supporting an orderly resolution for stakeholders. Aave indicated additional commitments will be announced as they are formalized, and that participating protocols and execution details will be published alongside the remediation framework.

According to an anonymous source involved in the rescue planning, a sequence of governance proposals and public updates is imminent: ‘Heads up, a series of proposals and tweets will flow. We’re getting really really close to wrapping this up.’ The source added that the process will take time but described the near-term outlook as positive for affected users: ‘It will still take time, but I can tell you it’s bullish news for the users. Hoping to share full disclosures in an official manner soon.’

EtherFi’s proposal commits to publishing a full remediation framework within seven days of approval, listing participating protocols, allocation methods and distribution mechanics, with deployment expected promptly after that. Market participants are awaiting the framework and further governance votes that will determine exact execution and timing.

The April 18 exploit created a shortfall that affected liquidity and lending positions across protocols that hold or reference rsETH. Aave’s reserve freezes on the five networks aim to limit further exposure while capital commitments and allocation rules are finalized.