Recovery efforts following the rsETH exploit on April 18 are ongoing. Aave, along with several partner protocols, has submitted a proposal to Arbitrum DAO to release previously frozen ETH. If approved, the funds will be used to restore collateral and compensate affected users through a cross-protocol initiative.

Timeline and Recovery Proposal

According to the proposal, Aave is collaborating with ether.fi, Kelp DAO, LayerZero, Compound, and other parties to request the release of ETH that was frozen by the Arbitrum Security Council.

The freeze was implemented as an emergency response to the rsETH incident on April 18, which raised concerns about collateral stability across several DeFi protocols. The frozen funds are now proposed to be allocated to an initiative called DeFi United.

“This initiative aims to restore rsETH collateral and ensure affected users receive fair compensation,” the proposal states, which is currently open for community review.

Cause Analysis and Cross-Protocol Coordination

The rsETH incident highlighted the complexity of cross-protocol integrations within the DeFi ecosystem, particularly those involving liquid staking and restaking mechanisms. Interdependencies between protocols amplify systemic risk when a failure occurs at a single point.

According to DeFi analysts, collaborative measures like DeFi United reflect an emerging approach to crisis management in the sector. Rather than acting independently, protocols are choosing coordinated responses to minimize cascading effects.

The involvement of LayerZero also underscores the importance of cross-chain infrastructure in recovery efforts, especially for tracking and managing assets distributed across multiple networks.

Support from Solana Foundation

On another front, the Solana Foundation has expressed support for the recovery efforts. Its president, Lily Liu, stated that the foundation has lent USDT to Aave as part of stabilization measures.

According to Liu, this move is intended to maintain liquidity and broader DeFi ecosystem stability. She also revealed plans to bring the AAVE token to the Solana network in the near future.

This step is considered strategic, as it could expand Aave’s reach while enhancing interoperability between the Ethereum and Solana ecosystems.

Conclusion

The proposal to release frozen ETH by Arbitrum DAO represents a key step in the post-rsETH exploit recovery process. With participation from major protocols and cross-ecosystem support, the initiative signals an evolution in how DeFi responds to crises.

The final decision now rests with the Arbitrum community. If approved, coordination models like DeFi United could become a new standard for risk mitigation and recovery in decentralized finance.