This is an important step that brings the company closer to restoring rsETH backing.
Aave Labs has successfully liquidated the attacker’s remaining rsETH positions on Ethereum (ETH) and Arbitrum (ARB). The recovered collateral has been transferred to the Recovery Guardian multisig wallet, which is managed by the DeFi United fund.
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This is an important step in the plan to restore rsETH backing and compensate affected users following the April 18 attack. According to Galaxy Digital estimates, DeFi United currently needs only about 10% more ETH▲$1,729.87 to fully cover the shortfall.
TVL Recovery
After the hack, Aave’s TVL fell by nearly $13B. However, thanks to active community efforts and liquidations, the metric has already recovered to above $15B.
Read more: Liquidity Provider 1inch TrustedVolumes Hacked for Nearly $6M
The Frozen Assets Problem
Full recovery is being hindered by a legal dispute. The US law firm Gerstein Harrow LLP has obtained a court freeze on 30,765 ETH that had previously been frozen by the Arbitrum DAO. The plaintiffs claim these funds as restitution in older cases related to North Korean terrorist activities.
Aave has filed an emergency motion in New York federal court demanding the freeze be lifted. The company calls the plaintiffs’ arguments “legally unsound” and warns of risks to the entire DeFi ecosystem.
The Arbitrum DAO vote on transferring the frozen ETH to DeFi United is underway, with support above 90%.
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