Lido offers $6M stETH to Aave’s rsETH shortfall relief if fully funded

Lido backs Aave’s rsETH recovery. It proposes up to 2,500 stETH (~$6M), but only if the package fully covers the deficit.

Aave’s rsETH shortfall followed KelpDAO’s LayerZero bridge exploit on April 18. Lido filed its plan on Aave’s forum. Read the proposal.

Aave launched a coordinated effort, “DeFi United,” and said multiple commitments are lined up. Lido is the first public participant. Aave’s update.

Key terms
- One-time, capped grant of 2,500 stETH from Lido. Funds return if unused. Source.
- Deployed only if the vehicle covers the entire shortfall, not a partial fix. The deficit exceeds 100,000 ETH. Source.
- Funds can be used solely to resolve the rsETH deficit. Source.

Exposure and risk controls
- Lido’s EarnETH vault is exposed to rsETH. Potential losses without support are ~9,000 ETH. Source.
- Aave paused rsETH reserves on Ethereum, Arbitrum, Base, Mantle, and Linea. Pause notice.

Market impact
- Since the hack news broke Saturday, Aave saw about $9B in net outflows as of April 21. Outflows report.
- Aave TVL fell by over a third to ~$17.5B, then to ~\$14.3B at reporting time. DefiLlama data.
- Across lending protocols, TVL dropped by roughly $13B within 48 hours after the exploit. Context.

Aave’s (AAVE) move aims to limit spillover and enable an orderly resolution, with Lido’s funds contingent on a fully funded package.