Kelp DAO has fully restored the collateral backing behind its rsETH token, weeks after a $293 million exploit drained the protocol's reserves. The recovery means the liquid restaking token is once again fully supported — a critical step for users who held the asset through the incident.
The $293 million exploit
The hack hit Kelp DAO's smart contracts, siphoning nearly $300 million in crypto. The attacker exploited a vulnerability in the protocol's code, though the exact method remains undisclosed. Kelp DAO paused operations immediately after the breach, halting deposits and withdrawals to contain the damage.
Restoring the reserves
Over the following days, the team behind Kelp DAO worked to replenish the lost funds. They drew on treasury reserves, insurance payouts, and fresh capital from investors. The restoration process wasn't instant — it required multiple transactions and coordination with external security firms. But by the end of last week, the protocol confirmed that rsETH's backing ratio had returned to 100%.
Users who held rsETH throughout the hack can now redeem their tokens at full value. Kelp DAO has reopened withdrawals, and the token's peg to its underlying assets has stabilized. For traders and DeFi users, the restoration removes the immediate risk of a collapse — though the episode has shaken confidence in the protocol's security.
The company hasn't released a full post-mortem of the attack. Questions linger about how the vulnerability was introduced and what changes will prevent a repeat. Kelp DAO says a detailed report is coming, but hasn't set a date.
