Aave Outlines Steps to Rebuild rsETH Collateral

Aave announced a coordinated recovery plan after an April 18 exploit that released 116,500 rsETH via a bridge vulnerability, impacting liquidity and collateral across chains. DeFi United will receive recovered tokens to redeem for ETH, which will then be converted back into rsETH and deposited into the bridge lockbox in stages to restore the token’s 1.017 ETH backing. Approximately 107,000 rsETH remain locked in active positions on Aave and Compound; Arbitrum froze 30,766 ETH tied to the exploit. Aave plans governance proposals on Ethereum and Arbitrum, temporary rsETH price adjustments to allow liquidations, and cross-protocol coordination with LayerZero and KelpDAO to harden security. The firm projects recovering ~13,000 ETH on Aave and ~16,776 ETH on Compound but warns of execution and governance risks, and the possibility of attacker interference. If executed successfully, the measures aim to stabilize affected markets without passing losses to users.