News linked to both this project and an event.
According to on-chain analyst Yu Jin (@EmberCN), the attacker responsible for the March THE liquidation event on the Venus platform sold 1,912 ETH for $3.26 million one hour ago to repay part of their loan on Aave. That loan was originally taken out by collateralizing ETH and was used to manipulate the Venus liquidations. The attacker’s address still has $6.78 million in USDT outstanding on Aave.
in April this year, KelpDAO's LayerZero bridge was exploited in a $292 million vulnerability attack, triggering an $8.45 billion deposit run on Aave within 48 hours, marking the largest capital outflow event in decentralized finance (DeFi) history. Aave founder Stani Kulechov stated that the design of Aave V3 withstood the market test, demonstrating the network's "resilience." However, independent data indicates that Aave's survival primarily relied on $300 million in emergency rescue, including a 25,000 ETH guarantee from the Aave DAO and a personal injection of 5,000 ETH (approximately $8.4 million) by Kulechov.Kulechov attributed the vulnerability to third-party infrastructure rather than core smart contracts. However, analysts pointed out that this incident exposed deficiencies in Aave's risk architecture and insurance mechanisms, leading the platform to incur significant bad debt (approximately $123.7 million in wETH). To prevent future bridge failures from triggering systemic bank runs, Aave V4 will adopt a modular "hub-and-spoke" architecture, enabling local risk auto-adjustment and collateral freezing. (CoinDesk)
Aave has published a post-mortem of the April 18 rsETH incident, stating that the rsETH LayerZero V2 cross-chain bridge of liquid staking protocol Kelp accepted a forged message during a cross-chain transfer from Unichain to Ethereum. This caused the adapter on the Ethereum side to release 116,500 rsETH without a corresponding burn on the Unichain side. Aave stated that the attack occurred on a third-party cross-chain bridge infrastructure. However, the attacker deposited the stolen rsETH into 8 Aave V3 positions, borrowing 82,650 WETH and 821 wstETH, which impacted the Aave market.Aave stated that the attacker's rsETH on Arbitrum has now been burned. The LayerZero OFT adapter has replenished 116,131.72 rsETH in 5 batches, and the asset backing for rsETH has been fully restored. The affected WETH and rsETH markets have returned to normal.
Odaily Kelp announced on X platform that it has coordinated with multiple DeFi protocols to complete the liquidation of the attacker's positions, achieving key progress in the rsETH recovery process. Among them: Compound participated in coordination multiple times over the past four weeks, providing approximately 3,000 ETH in support, and jointly completed the liquidation with Aave, recovering a total of approximately 17,426.20 rsETH; Euler Finance liquidated the attacker's positions within its protocol and plans to return the excess ETH to the DeFi ecosystem fund.
in April 2026, two major DeFi attacks on Drift Protocol and Kelp DAO resulted in losses of nearly $600 million, triggering approximately $9 billion in capital outflows from protocols like Aave. TRM Labs investigator Nick Carlsen stated that a hacker group suspected to be linked to North Korea has allegedly used AI to assist in target selection and attack path design. Failsafe CEO Aneirin Flynn said that AI has compressed the time for discovering blockchain vulnerabilities from months to days or even hours. The report noted that Anthropic has not fully opened its AI model Mythos due to cybersecurity risks, claiming the model has the capability to discover large-scale zero-day vulnerabilities. Its research indicates that over half of blockchain attacks in 2025 could theoretically be completed autonomously by AI. (Bloomberg)
that, according to official sources, AaveLabs has proposed restructuring the Aave DAO bug bounty framework into multiple specific subsystem programs, operating on the Immunefi, Sherlock, and Cantina platforms respectively. Core Aave V3, Core Aave V2, GHO, and non-liquidity protocol infrastructure will be covered by Immunefi; Aave V4 and the Aave App Stack will be covered by Sherlock; and Aave V3 on Aptos will be covered by Cantina.The proposal suggests adjusting the bounty scale for each system. The maximum reward for critical vulnerabilities in Core Aave V3 is $5 million, while the maximum reward for critical vulnerabilities in Aave V4 is $2.5 million. Additionally, the funding source for the Aave V3 bug bounty on Aptos will be transferred from Aave Labs to the Aave DAO. This ARFC proposal has currently been passed.
Aave announced that its bug bounty program has been updated to better align rewards with the risk profile of each component within the ecosystem and to streamline the review process. The reward cap for critical vulnerability fixes in Aave V4 and Core Aave V3 has now been increased fivefold.
Odaily Odaily News Gate Research recently released its "April 2026 Cryptocurrency Market Review" report, indicating that the overall cryptocurrency market saw a volatile upward trend in April, with total market capitalization significantly higher than in March. BTC and ETH ETF trading volumes maintained high volatility overall. The report shows continued divergence in activity across major public chain ecosystems. Solana's daily transaction volume remained in the range of approximately 90 million to 110 million transactions, maintaining its leading position.Regarding trending sectors, the report notes that Pokemon TCG RWA has become one of the fastest-growing on-chain RWA sub-sectors, entering a second explosive growth phase in April. Major trading platforms saw monthly trading volumes exceed $220 million, with weekly revenue briefly approaching $6 million, setting new historical records. Meanwhile, Aave experienced its most severe liquidity crisis ever in April, with TVL outflows reaching tens of billions of dollars within a few days and net outflows exceeding $9 billion for the entire month.In terms of fundraising and security incidents, the Web3 industry completed 51 financing rounds in April, totaling approximately $834 million, with capital further concentrating on leading financial and infrastructure tracks. Among these, Payward ranked first for the month with a $200 million financing round. On the security front, Web3 security incidents in April resulted in losses of approximately $306 million, a month-over-month increase of about 858%, primarily driven by a single cross-chain infrastructure attack on Kelp DAO worth approximately $293 million. The report suggests that against the backdrop of a recovering market, on-chain activity and capital liquidity are both increasing simultaneously. However, the security risks associated with cross-chain infrastructure and high-leverage protocols remain worthy of continued attention.
According to Cointelegraph, a New York judge has postponed the hearing on Aave’s emergency motion to unfreeze approximately $71 million worth of ETH and ordered Aave and Gerstein Harrow LLP to submit additional case briefs. A new hearing is scheduled for June 5. The court noted that Aave previously failed to adequately explain why users’ funds would suffer “derivative losses” if the restraining order remained in effect. The assets in question are linked to the Kelp DAO hack, which involved approximately $293 million and was previously frozen by Arbitrum. The judge also directed both parties to further clarify several legal issues, including the applicable law governing the hacker’s transactions, the legal distinction between fraud and theft, the priority ranking of creditors’ claims, the applicability of constructive trust, and whether assets can be proportionally returned to victims.
Aave posted on X, stating that the first phase of the rsETH technical recovery plan has been completed, including the burning of the attacker's rsETH on Arbitrum.In the coming days, funds will be gradually replenished for the LayerZero OFT adapter, and rsETH-related operations will be restored.
Odaily News: Margaret Garnett, a U.S. District Judge in Manhattan, has approved Aave's asset recovery proposal, allowing the transfer of approximately $71 million in ETH previously frozen on Arbitrum and linked to North Korean-linked attacks, to a wallet controlled by Aave LLC, while preserving the legal claims of terrorism victim plaintiffs over the funds. The ruling also amended the earlier freeze notice against the Arbitrum DAO, permitting the transfer to be executed through an on-chain governance vote and exempting those who propose, vote on, or participate in the transfer from liability under the freeze order. The transfer is still subject to an official vote by Arbitrum's on-chain governance. (CoinDesk)
Odaily Odaily: Aave posted on the X platform stating that the second phase of the technical solution for the rsETH incident recovery has progressed. On May 6, eight positions of the hacker on Aave V3 were liquidated, and the recovered rsETH collateral has been transferred to the recovery guardian. The Arbitrum DAO has passed a proposal to return the previously recovered $71 million in ETH.Regarding the application for asset freezing filed by the plaintiff, the judge has approved Aave LLC's proposal, allowing the transfer of the $71 million in ETH to Aave LLC through an on-chain vote by the Arbitrum DAO. Subsequent plans include burning rsETH on Arbitrum and restoring the rsETH reserve. After the reserve is restored, withdrawals will be reopened, and the WETH Loan-to-Value (LTV) ratio on the Aave V3 Ethereum mainnet will be restored.
The Mantle community has approved proposal MIP-34, authorizing the Mantle Treasury to extend a loan of up to 30,000 ETH to the Aave DAO to address the non-performing loan impact on Aave V3 resulting from the rsETH cross-chain bridge security incident on April 18, 2026. Per the proposal, the loan term is up to 36 months, with an annual interest rate of LIDO + 1%; the borrower may repay early without penalty. Regarding risk control, Mantle will hold a first-priority security interest in the relevant collateral assets. Additionally, Aave will provide supplementary collateral comprising no less than $11 million worth of AAVE tokens and protocol revenue, and delegate 130,000 AAVE tokens to Mantle for governance participation.
According to The Block, the Arbitrum DAO voted to release 30,765.6 ETH (approximately $70 million), previously frozen, to support the DeFi United initiative—aimed at offsetting Kelp DAO’s $292 million exploit loss last month. The vote passed with 90.96% support (182.2 million votes). The attack was allegedly carried out by the North Korean Lazarus hacking group, which exploited a vulnerability in LayerZero’s OFT cross-chain bridge—a single-validator configuration—which allowed attackers to steal 116,500 rsETH and pledge most of the stolen assets as collateral on Aave, resulting in roughly $190 million in bad debt. DeFi United has secured contributions from multiple parties, including 30,000 ETH from Consensys and Joseph Lubin, a 30,000-ETH loan from Mantle, and 5,000 ETH from LayerZero.
Linda Jeng, Chief Legal and Policy Officer at Aave Labs, stated during Consensus Miami 2026 that Aave's previous risk framework overly focused on financial risks and price volatility. Looking ahead, the protocol will incorporate assessments of cross-chain interoperability, cybersecurity vulnerabilities, and underlying asset architecture.This reform directly stems from the rsETH incident that occurred in April. At that time, an attacker exploited a vulnerability in the KelpDAO cross-chain bridge to mint approximately 116,500 unbacked rsETH (valued at around $293 million), deposited it as collateral into Aave, and borrowed real WETH, leading to significant bad debt risks for the protocol.Jeng revealed that Aave will also release a formal "listing standards handbook" for asset issuers in the future, and will begin evaluating the correlation between DeFi protocols from a systemic risk perspective, rather than analyzing individual pools in isolation.Additionally, a "DeFi United" bailout plan involving Lido Finance, EtherFi, Ethena, and others has been launched to cover collateral shortfalls and prevent further proliferation of bad debt. (CoinDesk)
Aave stated that, per the previously disclosed technical recovery plan, the attacker’s rsETH positions on Ethereum and Arbitrum have been liquidated on Aave, and the associated collateral assets have now been transferred to the Recovery Guardian address designated by the AIP. Aave noted that this action did not impact other users, nor did it affect the Umbrella mechanism, and emphasized that this step is a critical milestone in the overall recovery roadmap, with further recovery efforts continuing as planned.
Aave has announced the completion of the liquidation of the remaining rsETH position belonging to the Kelp DAO attacker. The related collateral assets will be transferred to the Recovery Guardian multi-signature wallet managed by DeFi United, to be used for restoring rsETH reserves and compensating affected users.This liquidation is part of the recovery plan following the previous $292 million attack incident. Aave had previously passed a governance vote to temporarily adjust the rsETH oracle price in order to create bad debt in the attacker's position and trigger liquidation. The relevant parameters will be restored upon completion of the liquidation. Previously, the attacker exploited the Kelp DAO cross-chain bridge based on LayerZero to forge 116,500 unbacked rsETH and borrowed ETH from protocols such as Aave and Compound. Currently, the recovery funds managed by DeFi United have exceeded $320 million.
Kelp DAO has announced the migration of its restaking token rsETH to Chainlink CCIP, citing enhanced security as the reason for this move. Previously, a cross-chain bridge built by Kelp DAO on LayerZero was attacked on April 18, with hackers stealing approximately 116,500 rsETH, valued at around $292 million, and using the assets as collateral to borrow WETH on Aave v3.Regarding the cause of the vulnerability, LayerZero previously stated that the issue stemmed from Kelp DAO using a single DVN verification path configuration rather than multiple independent verifications. Kelp DAO responded that this configuration was the default setting and that LayerZero had confirmed its security without flagging any related risks. LayerZero CEO Bryan Pellegrino subsequently denied this claim, stating that Kelp DAO had proactively modified the default multi-DVN configuration. Both parties continue to dispute responsibility for the incident. (Cointelegraph)
According to Cointelegraph, DeFi protocol Aave filed an emergency motion in New York on Monday seeking to vacate a restraining notice issued by U.S. law firm Gerstein Harrow LLP, which prevents the Arbitrum DAO from transferring 30,766 ETH to victims of the Kelp exploit. Gerstein Harrow LLP served the restraining notice on the Arbitrum DAO last Friday, asserting that its client is entitled to over $877 million in damages under a default judgment against North Korea. The firm claims that the North Korean hacking group behind the April 18 Kelp exploit previously held these tokens and that its client therefore holds a legal claim to the relevant ETH.
the Compound Foundation stated on X platform that, in coordination with the Kelp and Aave teams, and to avoid disrupting broader DeFi recovery efforts, the Comet markets for WETH and wstETH on Ethereum have resumed trading. It also noted that depending on the specific timing of Kelp's thawing of rsETH, temporary suspensions may still occur in relevant markets during the liquidation window for vulnerability-related positions. Specific arrangements have yet to be determined.