Amid the catastrophic situation in the DeFi sector, key protocols are coming together to reduce the damage caused by the Kelp DAO security breach. On April 23, the Mantle Network issued a formal proposal to provide a loan facility to a coordinated relief program announced by Aave.
Following this week’s rsETH incident involving @KelpDAO and @LayerZero_Core, a proposal has been submitted for Mantle to contribute a loan facility to @aave’s coordinated relief efforts.
The loan would be part of a broader coordinated framework, structured to…
— Mantel (@Mantle_Official) April 24, 2026
This project is called DeFi United and unites the DeFi sector to work on a recovery model. The main goal of this project is to raise support to support compromised assets and stabilize the credit markets that support the entire sector.
What is the Mantel’s new proposal?
The most important part of this proposal is to create a coordinated framework. This framework is designed to deal with the damage resulting from the unpegging of rsETH.
In the proposalCloak MNT1.45% has proposed using its own treasury as a liquidity backstop. This backstop will help Aave manage ‘bad debts’. These bad debts were created when attackers used unbacked tokens as collateral.
By providing a loan, Mantle offers support to reduce the imbalance in the market. It will help them avoid sudden liquidations that could drive down asset prices even further.
This proposal is part of a large movement, as Mantle is not alone in rallying support for it. For example, Lido Finance has committed 2,500 stETH to a special relief fund.
DeFi United’s main goal is to fill 100,000 $ETH shortage currently affecting rSETH supply. Moreover, they want to do this without placing the entire burden on the shoulders of the users of a single protocol.
Aave is my life’s work and we work non-stop to find the best possible outcome for users.
I personally contribute 5000 $ETH to DeFi United as we continue to work with partners to formalize more commitments. I’m working to get this resolved and market conditions…
— Stani (@StaniKulechov) April 23, 2026
The founder of Aave himself has expressed his support in this, saying: “I personally contribute 5000 $ETH to DeFi United as we continue to work with partners to formalize more commitments. I am working to see this resolved and market conditions normalized as quickly as possible.”
As of now, many DeFi projects have already expressed their support in the fight against the liquidity crisis EtherFi Foundation, Ethena, LayerZero, Tydro, the Ink Foundation and Golem Foundation.
How the Kelp DAO rsETH exploit happened on April 18
The Kelp DAO incident occurred on April 18 after a highly sophisticated attack on cross-chain infrastructure. The attackers targeted a so-called 1-to-1 authentication configuration. This configuration was in the LayerZero bridging adapter used for rsETH.
By breaking into the internal “Remote Procedure Call (RPC)” nodes and launching a DDoS attack on external data sources, the attackers hijacked the protocol authenticator in an echo chamber.
This allowed the hackers to enter incorrect data into the system. The fake data showed that 116,500 rsETH had been burned in the source chain. In reality, such a transaction never took place.
Following this, the Ethereum mainnet contract released approximately $292 million worth of rsETH tokens, which have no backing at all. The attackers then moved these phantom tokens to Aave V3 markets in Mantle, Arbitrum, and Ethereum.
They used these fake tokens as collateral to actually borrow about $190 million $ETH and stable coins. This trick transferred Kelp DAO’s losses to Aave’s credit pools, creating a shortfall for depositors.
Aave announces aid project to stabilize the ecosystem
In response to the bizarre attack, Aave has formed a partnership of DeFi projects to provide relief from the ongoing catastrophic situation that affected tokens like Arbitrum. The goal of DeFi United is to spread losses across government bonds and protocols. This means that they will not force regular private depositors to bear losses.
Aave has already frozen the rSETH reserves in Ethereum, Base, Mantle and Linea. This will help them prevent the further spread of the damage.