Aave and Kelp DAO Opens Full Operations for rsETH Tokens

After over a month of unrest and constant efforts, on Monday, Aave and Kelp DAO jointly announced that they have completely restored rsETH operations after the last trench of tokens was transferred to the LayerZero lockbox.

According to the official statement shared in the post on X, Kelp DAO mentioned that the final trench of 20,373.72 rsETH has been sent to the rsETH OFT adapter earlier today. With this, the DeFi platform has claimed that they have fully restored operations. 

Kelp DAO and Aave Restores rsETH Operation After 39 Days 

In one month, Aave and Kelp DAO team members have done commendable work to restore operations normally despite the constant criticism from the community for their weak security measures during the cyber attack. However, these efforts were also joined by other DeFi entities who showed their support in Aave’s DeFi United program.

On April 18, the Kelp DAO hack incident took place, and attackers managed to steal approximately $292 million worth of rsETH tokens after exploiting a loophole in its LayerZero-based cross-chain bridge. According to the official statement from Kelp DAO, hackers have siphoned off 116,500 rsETH tokens, which were around 18% of the token’s circulating supply.

The hack has created serious problems around the decentralized finance sector after the hackers moved the stolen rsETH tokens and used them as collateral on the Aave lending platform. This allowed them to borrow around $192 million worth of Wrapped Ethereum (wETH).

This action, done by attackers, has forced many platforms, including Aave, SparkLend, and Fluid, to freeze their markets on a temporary basis to avoid any further damage in this attack. This was an obvious moment where DeFi users started panicking and started rushing to withdraw their money from the DeFi sector. In just a few hours, more than $13 billion was wiped out from the sector.

After this attack, Wrapped Ethereum stuck around more than 20 different blockchains. Not just this, this attack has created bad debt in the DeFi sector.

In retaliation for this cyber attack, the Arbitrum Security Council managed to freeze around $71 million worth of Ethereum tokens that were linked to the hacker on the Arbitrum One network. This was the first major victory in the recovery of stolen funds.

After this attack, Kelp DAO, Aave, and a group of DeFi entities have announced a new initiative called DeFi United. This program has included a plan to raise recovery funds through Aave’s Recovery Guardian and Kelp’s own safe.

Apart from this, Aave and Kelp DAO have also burned the exploiter’s compromised rsETH tokens on Arbitrum, which were around 117,132. After this, they have started gathering ETH to refill the bridge’s lockbox and restore the proper backing for rsETH.

Some Users Still Facing Issues with hgETH Tokens

While Aave and KelpDAO have fully restored the operations for rsETH tokens, some users on X are still raising questions about issues with hgETH tokens. It is the liquid token issued by Kelp DAO’s High Growth Vault. 

According to some users on social media platforms, many hgETH token holders are facing problems with various operations like bridging, converting, or withdrawing their tokens even after the rsETH’s fill operation was announced.

These hgETH token holders are asking for a specific timeline regarding full hgETH operational restoration. As of now, Kelp DAO has not announced any major update related to this matter.

In the last few days, the team has announced the reopening of certain vaults, like agETH. Due to a lack of communication, various rumors are floating around the incident, and the Kelp DAO team needs to give clarification on it. 

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