Aave founder Stani Kulechov published a technical implementation plan on Tuesday to restore rsETH backing across affected protocols, with execution sequences set to begin within days.
Key Takeaways:
The recovery runs two parallel tracks, i.e., restoring rsETH’s nominal 1.07 ETH backing ratio through tranched ETH deposits, and clearing eight Aave positions. Post-exploit analysis found that 98% of rsETH collateral on Aave was concentrated in a single looping trade, a structural vulnerability that amplified the damage across the platform. Defi United’s cross-protocol recovery coalition now includes Compound, marking the broadest coordinated response to a decentralized finance exploit in recent memory. Single Looping Trade Left Aave ExposedThe stolen funds were subsequently distributed across multiple addresses, with a significant portion deposited as collateral on Aave V3 on Ethereum and another portion bridged to Arbitrum to open positions on Aave there. The remaining funds were routed through other venues.
Restoring the 1.07 ETH Backing Ratio Controlled Liquidation to Clear Exploiter Positions
