Kelp DAO Restores rsETH Five Weeks After $293 Million Hack Shook DeFi Market

Kelp DAO Completes rsETH Recovery After Major Exploit

Ethereum liquid staking protocol Kelp DAO says it has completed the operational recovery of its restaked Ether token, rsETH, nearly five weeks after suffering a $293 million exploit linked to North Korea’s Lazarus Group on April 18.

The protocol confirmed that the final batch of 20,373.7 rsETH tokens had been transferred to the LayerZero smart contract responsible for locking, minting, burning and releasing rsETH during cross chain transactions. According to Kelp DAO, this marks the completion of the recovery plan aimed at restoring the token’s backing.

Several crypto projects reportedly contributed support through the DeFi United initiative to help stabilize the ecosystem after the attack disrupted liquidity across decentralized finance markets.

Kelp DAO Hack Triggered Ripple Effect Across DeFi

The April exploit created wider pressure in the crypto lending sector, especially on Aave, one of the largest decentralized lending platforms. The attacker allegedly used around 116,500 stolen rsETH as collateral to borrow wrapped Ether, leaving Aave with nearly $190 million in bad debt and causing heavy withdrawals from the platform.

The hack also added to an already difficult month for crypto security. April recorded 25 separate crypto hacks with total losses reaching nearly $630 million, making it the worst month for crypto exploits since February 2025.

rsETH Services Return but Aave Recovery Remains Slow

Kelp DAO reopened rsETH withdrawals in mid-May after initially restoring cross chain transfers with a first tranche of 25,000 rsETH on May 13. The platform now says rsETH minting, rewards and redemption services are functioning normally again.

Although outflows from Aave have slowed, the protocol’s total value locked remains far below pre hack levels and has yet to show meaningful recovery.