DeFi United unveils plan to restore rsETH after $292 million Kelp DAO exploit

DeFi United, a coalition of DeFi participants, has outlined a technical plan to restore full backing for Kelp DAO's rsETH following a $292 million exploit. The exploit, attributed to North Korea's Lazarus Group, involved minting unbacked rsETH tokens, leading to significant bad debt on protocols like Aave. DeFi United, with over $300 million in ETH commitments led by Aave, will convert these funds into rsETH in tranches and deposit them into a lockbox contract to resume bridge operations. The plan also includes clearing affected positions on Aave and Compound through controlled liquidations and adjusting oracle prices. While aiming to restore rsETH without socializing losses, the plan carries risks, including potential attacker interference and the need for governance approvals. New security measures are still being tested, hence the phased approach to restoration.

(Source：The Block)