Ethereum

Aave

United

DeFi

LayerZero

Ethereum liquid staking protocol Kelp DAO says its restaked Ether token has been restored with a five-week recovery effort after the protocol suffered a $293 million exploit by North Korea’s Lazarus Group on April 18.
Kelp DAO <a href="https://x.com/KelpDAO/status/2058969965072654673" rel="noopener noreferrer nofollow">posted</a> to X on Monday that the final tranche of 20,373.7 Kelp DAO restaked ETH (rsETH) tokens was <a href="https://etherscan.io/tx/0x3be61d4336ea40ca2fa3aed20dc4ef672d4dfd029697a8b599661a6aff4767cb" rel="noopener noreferrer nofollow">sent</a> to the LayerZero smart contract responsible for locking, minting, burning and releasing rsETH during cross-chain transfers.&nbsp;
“This closes the operational part of the rsETH recovery plan,” Kelp said. Several crypto protocols <a href="https://x.com/KelpDAO/status/2058969972618170653" rel="noopener noreferrer nofollow">contributed</a> funds to help restore rsETH’s backing under the DeFi United initiative.
<img alt="Kelp DAO says rsETH restored 5 weeks after $293M protocol hack " height="283" src="https://s3-images.ctmedia.io/media/content/pasted-image-1000.png" width="687">Source: <a href="https://x.com/StaniKulechov/status/2059008862015934537" rel="noopener noreferrer nofollow">Stani Kulechov</a>
The Kelp DAO hack in April <a href="https://cointelegraph.com/news/restaking-platform-kelp-exploited-293-million" rel="noopener noreferrer nofollow">caused a ripple effect</a> throughout the crypto lending market that disrupted billions of dollars in liquidity and resurfaced concerns about the interconnectedness of decentralized finance protocols.
Aave was one of the hardest hit as the Kelp DAO attacker put a large portion of the stolen 116,500 rsETH up as collateral on its lending platform to borrow wrapped Ether, leaving $190 million in bad debt and triggering a wave of withdrawals.
The Kelp DAO hack was one of <a href="https://cointelegraph.com/news/crypto-hacks-cause-630m-losses-in-april-highest-since-february-2025" rel="noopener noreferrer nofollow">25 crypto hacks in April,</a> which saw a combined $630 million worth of losses, the worst month since February 2025, when crypto exchange Bybit was hacked for a <a href="https://cointelegraph.com/news/bybit-slow-steady-comeback-after-2025-hack-coingecko" rel="noopener noreferrer nofollow">record $1.5 billion</a>.
The first tranche of 25,000 rsETH was <a href="https://x.com/KelpDAO/status/2054642938433634660" rel="noopener noreferrer nofollow">transferred</a> on May 13, allowing rsETH bridging between the Ethereum mainnet and the blockchain’s layer 2 networks to reopen.&nbsp;
Kelp <a href="https://cointelegraph.com/news/kelp-dao-eyes-reopening-withdrawals-as-attackers-rseth-on-arbitrum-is-burned" rel="noopener noreferrer nofollow">reopened withdrawals for rsETH</a> the following day and <a href="https://x.com/KelpDAO/status/2058969969678057751" rel="noopener noreferrer nofollow">said</a> on Tuesday that rsETH mints, redemptions and rewards operations “have been running normally.”
<h2 id="strong-aave-s-tvl-bleed-stops-but-has-not-recovered-strong">Aave’s TVL bleed stops, but has not recovered</h2>
The Kelp DAO exploit contributed to <a href="https://cointelegraph.com/news/aave-tvl-falls-8-billion-after-kelp-dao-hack" rel="noopener noreferrer nofollow">Aave’s total value locked</a> falling from $26.4 billion to below $14 billion, losing its long-held position as the largest DeFi protocol by TVL.
Related: <a href="https://cointelegraph.com/news/private-key-compromises-led-crypto-hack-losses-decade" rel="noopener noreferrer nofollow">Crypto hackers stole $17B over past 10 years: DefiLlama</a>&nbsp;
DefiLlama<a href="https://defillama.com/protocol/aave?groupBy=monthly&amp;fees=false&amp;events=false" rel="noopener noreferrer nofollow"> data</a> shows that net outflows from Aave’s lending markets have eased over the past month.
However, Aave’s TVL has shown no signs of recovery, hovering between the $13.9 billion and $15.1 billion mark since about a week after <a href="https://cointelegraph.com/news/aave-s-risk-manager-shares-2-scenarios-to-allocate-losses-from-kelp-dao-hack" rel="noopener noreferrer nofollow">the incident</a> took place.
<img alt="Kelp DAO says rsETH restored 5 weeks after $293M protocol hack " height="523" src="https://s3-images.ctmedia.io/media/content/pasted-image-1001.png" width="991">Source: Aave’s change in TVL in 2026. Source: <a href="https://defillama.com/protocol/aave?events=false&amp;fees=false" rel="noopener noreferrer nofollow">DefiLlama</a>
Magazine: <a href="https://cointelegraph-magazine.com/legal-battle-over-who-defis-stolen-millions/" rel="noopener noreferrer nofollow">The legal battle over who can claim DeFi’s stolen millions</a>&nbsp;

Kelp DAO says rsETH restored 5 weeks after $293M protocol hack

Table of Contents

Cointelegraph

Other articles published on May 26, 2026

Join our free newsletter for daily crypto updates!