LayerZero Pledges 10,000 ETH to DeFi United Industry Actions Behind Kelp Dao Recovery

TLDR:

LayerZero Labs is donating 5,000 ETH and putting another 5,000 ETH into Aave to bolster market size.

The $292M Kelp DAO exploit involved an RPC poisoning attack that created cross-chain messages via the LayerZero DVN.

DeFi United has raised over $300M in ETH and statscoins, with major contributors including Consensys and Arbitrum DAO.

Following the Kelp DAO hack, the total value locked in DeFi dropped from $95B to $80B, indicating widespread market disruption.

LayerZero Labs has donated over 10,000 ETH to the Aave-led DeFi United recovery initiative following the $292 million Kelp DAO exploit.

The crypto infrastructure provider donates 5,000 ETH directly and puts another 5,000 ETH into Aave markets.

This contribution, valued at $23 million, puts LayerZero among the largest contributors to the effort to restore support for rETH after the April 18 attack.

LayerZero's contribution to Defy United

LayerZero's pledge comes about five days after the company announced its intention to join the recovery effort.

The organization works to increase liquidity for GHO's native stablecoin on Aave. This move shows a commitment that goes beyond a simple monetary donation.

LayerZero confirmed the details in an official post on X “By donating 5,000 ETH to Defy United, putting an additional 5,000 ETH to strengthen Ave's market liquidity and strategically deepen GHO's liquidity.”

LayerZero has confirmed plans to work with Aave and other DeFi participants. The focus will be on how to design and structure Omnichain Fungible Tokens (OFTs) for use in credit markets. This collaboration can shape future standards on the ecosystem.

The April 18 exploit involved a sophisticated RPC poisoning attack on LayerZero's decentralized authentication network.

Attackers created a cross-chain message, releasing unsupported rETH from Kelp's LayerZero-powered bridge adapter on Ethereum. About 107,000 rETH was then entered into loan positions on Ave, which created a large amount of bad debt.

Industrial response and recovery process

DeFi United has now raised over $300 million in ETH and stablecoins from many protocols and individuals. Arbitrum DAO has a pending vote to release 30,765 ETH to the effort.

Consensys and Joseph Lubin contributed 30,000 ETH together to match Mantle's low-interest loan.

Aave DAO has a pending proposal to approve a 25,000 ETH contribution. This includes a personal pledge of 5,000 ETH to Aave founder Stany Kulekov. Kelp DAO contributed 2,000 ETH, while Circle is buying AAVE tokens to support the stability of the protocol.

There is still a debate about the responsibility for the attack. Defines LayerZero. “Recommended Revision of Multi-DVN”. To prevent single points of failure. But Kelp says so. “Default configuration used.” Offered, which is a 1-to-1 DVN setup as verified by LayerZero Labs only.

Meanwhile, the total value locked in DeFi has dropped to $80 billion, down from about $95 billion before the hack.

Aave has released a detailed technical recovery plan, and extensive efforts to restore rETH support continue to move forward.