Aave Launches rsETH Event Compensation Query Tool to Address Overissuance and Restore Market Operations

On May 9, Aave announced the second phase of its technical recovery plan for the rsETH incident. On April 28, Aave unveiled a V3 technical recovery solution in response to the rsETH hacking event, and significant progress has been made on Ethereum Core and Arbitrum. On May 6, eight Aave V3 positions held by the thief were successfully liquidated, and the recovered rsETH collateral has been transferred to the Recovery Guardian as per the AIP, with other users (including Umbrella stakers) unaffected. Additionally, governance proposals from both Mantle DAO and Arbitrum DAO have been approved, with the latter agreeing to return $71 million in ETH recovered by the security council to Aave for the DeFi United joint recovery effort. There has also been positive legal progress: a court has ordered that Arbitrum DAO be allowed to transfer the frozen ETH to Aave LLC through on-chain voting, with a restraining order to follow the transfer, and Aave LLC is awaiting a final ruling. As a temporary measure, the team has borrowed additional funds to cover the gap, ensuring that users are not affected by delays. The next phase of the recovery plan will focus on addressing the overissuance of rsETH and restoring normal market operations. On Arbitrum, the rsETH obtained from liquidations will be burned, and KelpDAO will simultaneously destroy the corresponding LayerZero cross-chain message packets, completely eliminating the excess rsETH supply resulting from the attack. On Ethereum, the seized rsETH will be transferred to a bridge vault, and combined with the ETH pledged by the DeFi United alliance to back the vault, normal operations of the bridge will resume once the backing is complete. Subsequently, rsETH withdrawals will reopen, and the protocol parameters temporarily adjusted for liquidation will be reverted, with remaining affected positions being closed using raised funds in ETH. Meanwhile, the LTV parameter for WETH on Aave V3 Ethereum Core will soon return to normal. The compensation query tool is now live, allowing users affected by the rsETH incident to check their expected compensation amounts.