Arbitrum DAO Votes on Releasing 30,766 ETH to DeFi United After Kelp DAO Attack

TLDR

• Arbitrum DAO is voting to release 30,766 ETH to DeFi United.
• The frozen ETH was linked to the Kelp DAO attacker’s Arbitrum address.
• The vote runs until May 7 and showed early support from ARB holders.
• DeFi United has raised over $300 million for Kelp DAO recovery.
• Arbitrum could become the largest contributor if the vote passes.

Arbitrum DAO has opened a governance vote to release 30,766 ETH that was previously frozen following the Kelp DAO exploit, according to reports. The funds, valued at about $71 million at the time of the freeze, were secured by the Arbitrum Security Council after the attacker moved assets to an address on Arbitrum One.

The vote is scheduled to run until May 7, with early participation showing strong support. Within the initial phase, millions of ARB tokens were committed in favor of the proposal, while no opposing votes were recorded at that stage. The governance decision will determine whether the frozen assets are transferred to the DeFi United initiative, which was created to support recovery efforts linked to the Kelp DAO incident.

The Arbitrum Security Council had intervened on April 20, acting through its emergency authority to freeze the assets after identifying the destination address used by the attacker. The funds were moved to a designated holding address that requires DAO approval for any further action.

Security Council Action and Governance Process

According to reports, the Security Council acted after receiving input connected to the investigation into the exploit. The council used a 9-of-12 approval mechanism to execute the freeze, aiming to prevent further movement of the funds while the situation was assessed.

The decision to freeze assets sparked discussion across the community. Some participants raised questions about the use of emergency powers and manual intervention within a network designed for decentralized operations. Others pointed to the council’s mandate to protect the ecosystem, stating that the action aligned with its responsibilities.

The frozen ETH represents a portion of the funds linked to the Kelp DAO exploit, which involved the movement of assets across multiple protocols. The attacker transferred funds through various platforms, including lending protocols, where assets were used as collateral to borrow additional tokens.

The governance vote now serves as the mechanism to determine the next step for those funds. If approved, the ETH will be directed to DeFi United, a collective effort formed in response to the incident.

DeFi United Fund and Industry Contributions

DeFi United was established to coordinate recovery efforts after the Kelp DAO exploit, which resulted in losses of about $292 million. The initiative has attracted contributions from multiple participants across the digital asset sector.

As of recent data, DeFi United has secured more than $300 million in combined support through donations and loans. The contributions include ETH and stablecoins provided by protocols, organizations, and individual contributors.

If the Arbitrum DAO vote passes, the 30,766 ETH allocation would represent one of the largest contributions to the initiative. Other participants have also committed substantial amounts. Consensys and Joseph Lubin jointly provided 30,000 ETH, while Mantle offered a loan of the same size. Aave DAO is also considering a separate proposal involving 25,000 ETH, in addition to a 5,000 ETH contribution from its founder.

LayerZero has contributed 5,000 ETH and deployed an additional 5,000 ETH into lending markets, where the assets generate yield. Kelp DAO itself has contributed a smaller allocation as part of the recovery process.

The combined contributions have reached a level that aligns with the scale of the losses linked to the exploit. The initiative is structured to support the restoration of affected assets and maintain stability within related systems.

Broader Context of DeFi Security Incidents

The Kelp DAO exploit is part of a wider series of security incidents affecting decentralized finance platforms. Reports indicate that attackers exploited a cross-chain communication channel to access funds tied to rsETH, a staked asset within the protocol.

Following the breach, assets were moved across networks and integrated into lending systems, creating large debt positions backed by the compromised collateral. Several protocols responded by pausing specific functions to limit further exposure.

The Arbitrum Security Council’s intervention was one of several actions taken across the ecosystem to contain the situation. Other platforms also implemented temporary restrictions or adjustments to protect users and infrastructure.

Recent data from security firms show that losses across decentralized finance platforms have exceeded hundreds of millions of dollars in recent weeks. The Kelp DAO incident ranks among the largest events during this period, alongside other exploits involving trading platforms and liquidity systems.

The post Arbitrum DAO Votes on Releasing 30,766 ETH to DeFi United After Kelp DAO Attack appeared first on CoinCentral.