DeFi United unveils plan to restore rsETH backing

DeFi United published a technical implementation plan to restore rsETH’s ETH backing after the April 18 LayerZero bridge exploit on KelpDAO, which removed about $292 million — roughly 116,500 rsETH. The coalition aims to recover about 107,000 rsETH currently held in exploiter-controlled positions.

The group, led by Aave service providers and including other ecosystem participants, reported seven wallets tied to the exploiter still hold active rsETH-backed positions on Aave and Compound that total about 107,000 rsETH. Security researchers have linked the attack to actors likely associated with North Korea’s Lazarus Group.

DeFi United set two goals: return rsETH to its nominal Kelp exchange ratio of 1.07 ETH and recover the excess collateral represented by the exploiter-held rsETH. The coalition says it has secured the ETH commitments needed to restart affected systems, but final execution depends on governance approvals, execution timelines and signed agreements.

Under the proposed implementation, the committed ETH will be converted into rsETH in tranches and deposited into the bridge lockbox contract (RSETH_OFTAdapter 0x85d456b2…98ef3) to restore backing and allow the bridge to resume full operation. The blog post states: “The restoration process involves converting the committed ETH into rsETH in tranches, which will then be transferred to the affected lockbox contract, allowing the bridge to securely resume full operation.”

The plan also calls for closing eight affected positions on Aave’s Ethereum Core and Arbitrum markets to recover about 13,000 ETH and resolve a related impairment. Those position closures require governance proposals to pass on both Ethereum and Arbitrum before the actions can proceed.

DeFi United says it intends to restore rsETH backing without socializing losses across holders but lists risks that could affect outcomes. Attacker interference with the positions could prompt additional liquidation steps, and protections added by LayerZero and KelpDAO still need validation in live conditions. The blog post noted: “Residual risk remains until those measures are validated in production.”

Timing for execution will hinge on governance votes and finalized legal and operational agreements. If approvals and transactions proceed as outlined, the coalition expects the pledged conversions and deposits to restore rsETH backing and allow the bridge and related lending markets to resume normal operations.