Mantle proposes 30,000 ETH loan to Aave DAO to cover bad debt

Mantle, a layer 2 blockchain connected to Bybit, has put forward a proposal to lend up to 30,000 ETH from its treasury to Aave DAO. This credit facility is intended to address losses incurred due to an exploit on Kelp DAO's rsETH bridge. The attackers exploited a vulnerability to mint over 116,000 rsETH tokens, some of which were deposited into Aave to borrow approximately $190 million, creating significant potential bad debt for the Aave V3 protocol.

The proposed loan terms include an interest rate of Lido yield plus 1%, a maturity of up to 36 months, and the option for early repayment. Mantle aims to generate yield on its idle treasury capital while simultaneously aiding Aave's recovery efforts. To mitigate risks, the loan will be secured by collateral in a multisig wallet, backed by Aave protocol revenue and tokens, and include default protections. Mantle will also participate in Aave's governance through delegated AAVE tokens.

(Source：Crypto Briefing)