Kelp DAO burned the rsETH tokens held by the attacker behind last week's exploit, the protocol confirmed Thursday. The move is part of a broader two-week plan to restore liquidity and eventually unpause withdrawals for users.
The exploit and immediate response
Attackers drained a portion of the protocol's rsETH reserves earlier this month, forcing Kelp DAO to pause withdrawals and scramble to contain the damage. After identifying the exploiter's wallet, the DAO voted to burn the stolen tokens — effectively removing them from circulation. No figure on the amount burned was disclosed, but the action eliminates any potential leverage the exploiter could have used to further destabilize the system.
Recovery plan hinges on Aave's Recovery Guardian
To refill the depleted rsETH reserves, Kelp DAO will tap into Aave's Recovery Guardian multisig wallet. That contract, designed for emergency fund restoration in DeFi crises, will serve as the vehicle to inject fresh rsETH liquidity over the coming weeks. The DAO described the two-week timeline as sufficient to fully replenish reserves and re-enable normal operations.
What users can expect next
Withdrawals remain paused for now. The two-week recovery window means affected users should expect to see the freeze lifted by early next month, assuming no further complications. The protocol has not specified a precise date but said it will provide updates as the replenishment progresses. Meanwhile, the burned tokens are gone — the exploiter no longer holds any rsETH linked to the incident.
The question now is whether the recovery timeline holds. If the Aave multisig refill goes smoothly, Kelp DAO could resume business as usual before the end of the month. If not, the pause could stretch longer.
