Five Major DeFi Protocols Ask Arbitrum DAO to Free 30,765 ETH Locked After rsETH Bridge Bug

A coalition of five DeFi projects (Aave Labs, KelpDAO, Layerzero, Etherfi and Compound) filed a Constitutional AIP on April 25 asking the Arbitrum DAO to release 30,765.6675 ETH frozen by the Arbitrum Security Council after the April 18 KelpDAO rsETH bridge exploit. The release would be routed to a 2-of-3 Gnosis Safe for rsETH remediation and aims to close an estimated backing shortfall of ~76,127 rsETH. The proposal requests no new treasury allocation, includes indemnification from Aave Labs, and outlines a ~49‑day governance timeline if it advances. Market impact: releasing the frozen ETH and coordinated remediation would narrow collateral gaps, reduce contagion risk across Aave/Arbitrum markets and could calm DeFi market sentiment around rsETH and related lending positions; failure to coordinate could prolong uncertainty and downside pressure on affected tokens and liquidity.