The protocol coalition led by Aave Labs has filed a constitutional proposal with the Arbitrum community. The authors request the release of 30,765.67 ETH▼$1,664.42 frozen by Arbitrum’s Security Council on April 21.
The coalition of protocols led by Aave Labs has filed a constitutional AIP (Aave Improvement Proposal) with the Arbitrum community. The authors request the release of 30,765.67 ETH, approximately $71M, frozen by Arbitrum’s Security Council on April 21.
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The funds belong to the hacker who attacked Kelp DAO. If approved, the ETH will go to the DeFi United initiative to restore rsETH token backing.
Contents
Seven Weeks for Review: Why the Timeline Raises Concerns
The constitutional AIP process takes approximately 49 days. It includes one week of discussion, a temperature check, a delay before voting, 14 to 16 days of on-chain voting, an 8-day L2 waiting period, L2-to-L1 message finalization, and a three-day L1 waiting period before execution. Delegates have already called for acceleration.
“Many parties have open positions on AAVE▼$65.47 that might run into problem if they have to wait 49 days,” wrote delegate Nicksta.
Arbitrum Security Council member Griff Green proposed conducting a Snapshot vote “as soon as possible.”
Who Has Already Contributed
At the time of writing, the DeFi United tracker shows $245.2M raised from more than 116,000 wallets. The largest donors include:
- Mantle—proposed credit line of 30,000 ETH
- Aave DAO—25,000 ETH
- Hacker’s frozen funds on Arbitrum—approximately 30,700 ETH
- Aave founder Stani Kulechov—5,000 ETH (personal contribution)
- EtherFi Foundation—5,000 ETH
- Lido Finance—2,500 stETH
- Babylon Foundation—$3M in USDT▼$0.9994
Read more: DeFi United—Aave and DeFi Giants Pledge ETH After Kelp Hack
Aave Senior Vice President of Engineering Emilio Frangella contributed 500 ETH. Golem, BGD Labs, and private community members also contributed.
Aave Metrics: TVL Stabilizes but Fees Rise
Aave’s TVL decline has stopped at approximately $14B. Since the attack, deposit volume has shrunk by more than $12B. However, analytics firm aixbt labs noted that during the crisis week, the protocol generated an average of $1.7Min daily fees—63% of Ethereum’s revenue.
“100% utilization of the rsETH pool means maximum borrowing rates. The protocol literally makes more money when it is under attack,” the post stated.
DeFi United has become the largest coordinated rescue operation in DeFi history. If the Arbitrum proposal is approved, the hacker’s frozen funds will become the largest single contribution.
However, legal complexities—the proposal includes an extensive indemnification clause to protect the Arbitrum Foundation and Security Council—and the lengthy voting timeline create risks. Restoring rsETH backing could take weeks.
If something goes wrong, individual users may not receive full compensation. The exact mechanism for socializing losses has not yet been determined.
Read more: JPMorgan—Why DeFi Hacks Scare Off Large Investors
