TLDR:An attacker minted 116,500 unbacked rsETH tokens worth $292M by exploiting Kelp DAO’s LayerZero bridge in April.Aave paused rsETH markets on five networks to prevent further losses while the DeFi United coalition executed recovery.Over 117,000 rsETH tokens valued at $278M will refill recovery reserves in stages through the end of May 2025.Lido confirmed zero user losses, with deposits set to reopen after a brief stabilization window post-market restart.The Aave protocol has officially unpaused rsETH markets across five blockchain networks. This follows a coordinated recovery effort after a major exploit hit Kelp DAO’s LayerZero bridge in April. The DeFi United coalition, comprising Aave, Kelp DAO, Lido, and LayerZero, worked together to resolve the crisis. Over $292 million in assets were involved, making it one of DeFi’s largest collaborative recoveries to date.Aave Restores rsETH Access Across Multiple NetworksOn April 18, an attacker exploited Kelp DAO’s LayerZero bridge infrastructure. The breach allowed the attacker to mint 116,500 unbacked rsETH tokens, valued at approximately $292 million. Using these tokens, the attacker borrowed over $190 million in ETH from Aave and other lending protocols.In response, Aave moved quickly to pause rsETH markets. The pause covered Ethereum, Arbitrum, Base, Linea, and Mantle networks. This protective measure stopped further borrowing activity while recovery efforts began across the coalition.The DeFi United coalition then executed a structured response plan. Teams worked to liquidate the attacker’s positions, burn the fraudulent tokens, and secure remaining funds. This multi-protocol approach helped contain the damage without triggering a wider market collapse.Aave has since confirmed the markets are live again. The protocol posted on X, stating that rsETH is now unpaused on Ethereum Core, Arbitrum, Base, Linea, and Mantle, allowing users to withdraw their rsETH holdings freely.rsETH is now unpaused on Aave's Ethereum Core, Arbitrum, Base, Linea, and Mantle markets enabling users to withdraw rsETH. https://t.co/7DNugfQhED— Aave (@aave) May 14, 2026Recovery Plan Moves Into Final Stages With Staged RefillKelp DAO confirmed that rsETH withdrawals, bridging, and claims are now fully active. The restart followed a coordinated plan between Kelp and Aave to restore normal protocol functions. Exchange rates were scheduled for an update around 4:30 PM CET on May 15, covering all staking rewards earned during the pause period.Kelp DAO also noted on X that eigen claims would be processed alongside the rate update. Deposits, however, remain temporarily closed. They will reopen after a brief stabilization window to allow the system to normalize before new capital enters.Over 117,000 rsETH tokens, valued at approximately $278 million, will refill recovery reserves in stages. The process runs through late May, with the remaining tranches sent over the next two weeks. Both Aave and Kelp are responsible for completing the lockbox refill on schedule.Lido confirmed that no user funds were lost during the entire incident. Aave founder Stani Kulechov described the unpause as the final step in the recovery process. Ether.fi CEO Mike Silagadze praised the effort, calling the coordinated outcome a miraculous recovery. Kelp also confirmed that rsETH remains fully backed across mainnet and all Layer 2 networks.The post Aave Unpauses rsETH Markets After Coordinated $292 Million Kelp DAO Recovery appeared first on Blockonomi.