Arbitrum DAO Approves $71M Frozen Ether Release

Arbitrum DAO delegates overwhelmingly approved on Friday the release of 30,765 ether, valued at approximately $71 million, that had been frozen following an April 18 exploit targeting Kelp DAO's rsETH token. The on-chain vote garnered more than 90 percent support from participating voters, authorizing the transfer to a multisignature wallet controlled by representatives from Aave, Kelp DAO, EtherFi, and Certora as part of a broader industry recovery effort.

The exploit involved an attacker exploiting a vulnerability in Kelp DAO's LayerZero-powered cross-chain bridge, minting 116,500 unbacked rsETH tokens on Ethereum without corresponding burns on the source chain. The attacker then used the tokens as collateral on Aave to borrow around 230 million in ether from the lending protocol, leaving it with significant bad debt. Arbitrum's Security Council froze the ether on April 21 after the attacker moved it to an Arbitrum One address, acting with input from law enforcement.

The approved funds will support the DeFi United initiative, coordinated by Aave, Kelp DAO, LayerZero, EtherFi, and Compound, to compensate affected rsETH holders and restore backing for the token. The effort...