DeFi United Publishes Technical Roadmap to Reinstate rsETH and Recover Funds After Bridge Exploit

DeFi United, a coalition of decentralized finance participants, published a technical implementation plan Tuesday to restore support for Kelp DAO's rsETH and recover roughly 107,000 tokens that remain under an attacker's control, according to CoinDesk. The group said the exploit stemmed from a vulnerability affecting rsETH: a LayerZero-powered bridge on the Unichain-to-Ethereum route accepted forged inbound packets on Ethereum without a corresponding burn on Unichain. As a result, 116,500 rsETH were released from the Ethereum-side adapter. The proceeds were split across multiple addresses and used as collateral in lending markets. DeFi United said seven addresses tied to the attacker still hold active rsETH-backed positions on Aave and Compound totaling about 116,500 rsETH, described as roughly half of the 107,000 rsETH stolen. On restoration, the coalition said it has secured the ETH commitments needed to re-enable rsETH support, with final implementation pending governance approval and execution of the final agreement. The pledged ETH will be converted into rsETH in batches and transferred into the bridge lockbox contract, allowing normal bridge operations to resume. The plan targets a nominal rsETH exchange rate of 1.07 ETH. The funding effort has been narrowing an initial 163,200 ETH shortfall. LayerZero Labs pledged to contribute more than 10,000 ETH, including a 5,000 ETH direct donation to DeFi United and another 5,000 ETH deposited into the Aave market to bolster liquidity. The company also said it will deepen liquidity for Aave's GHO stablecoin at a strategic level. To unwind the exploiter's overcollateralized borrowing, DeFi United said governance proposals will be required for Aave's Ethereum and Arbitrum deployments. The process calls for controlled liquidations, including a temporary adjustment to the rsETH oracle price to facilitate efficient liquidation. This is expected to create a short-term deficit that would be addressed in later steps. Recovered rsETH would be sent to the DeFi United multisig and redeemed for ETH through Kelp's standard redemption flow, with the resulting ETH used to cover Aave deficits on Ethereum and Arbitrum. Aave's liquidation process is expected to recover about 13,000 ETH. Compound is expected to follow a similar approach, supported by liquidity from DeFi United, with an estimated recovery of 16,776 ETH. DeFi United said Ethereum Core, Arbitrum, Base, Mantle, and Linea will remain frozen during the process. The final phase would pause and then unfreeze rsETH and ETH in affected instances and restore loan-to-value ratios for assets whose risk parameters were temporarily adjusted. The coalition flagged several execution risks, including reliance on final agreement signatures and governance approval for ETH deployment. It also warned that deliberate interference by attackers could prevent losses from being fully realized, requiring additional liquidation steps to fully close positions. Bridge risk will persist until the newly implemented LayerZero and Kelp security measures are validated in a production environment. This article was assisted by an AI workflow. All articles are manually curated, edited, and fact-checked.