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Aave Labs, Kelp DAO, LayerZero, EtherFi, and Compound have asked the Arbitrum DAO to release 30,765.67 ETH tied to the Kelp DAO exploit recovery plan. The request follows the freezing of the assets by the Arbitrum Security Council after they were linked to the exploiter.
The proposal seeks the release of 30,765 ETH to support rsETH recovery efforts. The funds would be moved to a Gnosis Safe managed by Aave, Kelp, and Certora.
The frozen ETH is valued at about $71 million, based on Ethereum trading near $2,317 at the time of writing. The proposal would direct the assets to DeFi United, a cross-protocol recovery effort created after the $292 million Kelp DAO exploit.
According to the filing, the recovered ETH would be held in a 2-of-3 Gnosis Safe controlled by Aave, Kelp DAO, and Certora. The wallet would be used to receive recovered funds and to help restore rsETH’s economic backing.
If the recovery plan does not proceed as expected, the authors said they would return to Arbitrum governance for further direction. Kelp DAO said on X, “Every ETH released moves rsETH holders closer to whole.”
The filing also describes the exploiter’s activity on Aave. It states that the attacker supplied 89,567 rsETH as collateral and borrowed 82,650 WETH and 821 wstETH across Aave’s Ethereum Core and Arbitrum V3 markets.
Aave said its smart contracts were not compromised. The proposal frames the incident as an external exploit affecting assets used across DeFi markets, rather than a direct failure in Aave’s lending system.
Supporters face timing pressure because Arbitrum’s Constitutional AIP process can take about 49 days. The process includes forum review, possible temperature checks, voting delays, onchain voting, and cross-chain execution steps.
Some Arbitrum delegates questioned whether the timeline is too long for users with active Aave positions. Delegate Nicksta wrote that “many parties have open positions on AAVE that might run into problem if they have to wait 49 days.”
Arbitrum Security Council member Griff Green also backed a faster community signal. As a delegate, he said the DAO should move to Snapshot “as soon as possible” to confirm community intent before final execution.
Green asked for clearer details on how rsETH holders and Aave users would be treated under full or partial recovery plans. The proposal includes an indemnification clause from Aave Labs covering the Arbitrum Foundation, Offchain Labs, and Security Council members.
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