Arbitrum DAO has approved a transfer of more than 30,000 ETH — about $71 million — to support Aave’s recovery after the rsETH bridge exploit in April. This is a governance intervention, not protocol earnings or a routine treasury move. The funds are frozen assets tied to the attack, and they’re set to go to a recovery address controlled by Aave, KelpDAO, EtherFi, and Certora.
The breach began when KelpDAO’s rsETH bridge, built on LayerZero messaging infrastructure, was exploited for about 116,500 rsETH — valued near $292 million — through forged cross-chain messages. Some of that unbacked collateral was then used on Aave, leaving the protocol and affected users facing a major shortfall.
The Arbitrum vote cleared quorum with strong support, so the recovery effort now has a defined pool of ETH behind it. But legal uncertainty still hangs over the transfer. A restraining notice served on Arbitrum DAO on May 1 over alleged North Korean involvement could delay the release of those assets. Mantle DAO has also offered an emergency credit line of up to 30,000 ETH as a backstop. So governance has authorized a meaningful recovery step, but the ultimate resolution still depends on how the legal process unfolds.