Ethereum Backers Pledge 30,000 ETH to rsETH Recovery Post-Exploit
Darius Baruo Apr 27, 2026 21:00
Consensys and Joe Lubin commit 30,000 ETH to stabilize rsETH after a $290M exploit disrupted DeFi markets. Governance approvals pending.
Ethereum co-founder Joe Lubin and Consensys have stepped up to support the recovery of rsETH following a $290 million exploit that shook the DeFi ecosystem. The group, along with other backers including DeFi United, has pledged up to 30,000 ETH to stabilize rsETH markets and assist affected users.
The exploit, which occurred on April 18, targeted a LayerZero-based bridge operated by Kelp DAO, draining approximately 116,500 rsETH. The attack caused significant disruptions across decentralized finance, with multiple protocols halting operations to mitigate further risks. Notably, Aave suffered up to $200 million in bad debt as the attacker used rsETH as collateral to borrow liquidity, forcing the protocol to freeze its rsETH markets.
The recovery plan spearheaded by DeFi United includes major participants like Lido, EtherFi, Ethena, Mantle, and Frax. The group’s immediate goal is to provide liquidity while governance approvals across involved protocols are finalized. Sharplink, an Ethereum treasury company, has joined as an advisor to help structure the recovery effort.
Preliminary investigations by LayerZero Labs identified the exploit's root cause as a configuration error in Kelp DAO’s bridge, which depended on a single verification path for cross-chain messages—a critical vulnerability that was exploited.
Adding to the collaborative recovery efforts, Circle announced that its venture arm is purchasing AAVE tokens to support the protocol and the broader DeFi ecosystem.
DeFi Hacks Escalate in 2026
The rsETH incident is only one in a growing list of high-profile DeFi hacks this year. According to DefiLlama, April alone saw losses of approximately $623 million from exploits, with the year-to-date total reaching $729 million. Earlier in the month, Drift Protocol suffered a $280 million exploit via social engineering, and Rhea Finance faced a $7.6 million loss due to a margin trading vulnerability.
Experts warn that advances in AI could further exacerbate these risks. Late last year, researchers demonstrated that AI models could identify over 50% of known smart contract vulnerabilities, potentially accelerating future attacks. As a result, the crypto community is increasingly focused on robust security measures and multi-signature setups to prevent similar breaches.
Looking ahead, Polymarket traders currently assign an 84% probability of another crypto hack exceeding $100 million before the end of 2026. For now, the rsETH recovery effort is a critical test of how DeFi protocols can collaborate to address systemic risks.
Image source: Shutterstock- ethereum
- defi
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