Mantle tokenholders have approved a 30,000 ETH credit facility on the lending protocol Aave. The move is designed to help Aave address bad debt that piled up after the April exploit of rsETH, which strained Aave's WETH market.
How the exploit created the bad debt
The rsETH exploit hit in April, causing a wave of liquidations and leaving Aave's WETH market saddled with bad debt. The exact size of the shortfall hasn't been disclosed, but the strain was enough that the protocol needed outside help. Mantle's tokenholders stepped in, voting to allocate 30,000 ETH as a credit line to Aave.
What the credit facility does
The credit facility acts as a safety net. Aave can draw on the 30,000 ETH to cover the unpaid loans left by the exploit. Mantle's tokenholders approved the measure, signaling confidence that the debt can be recovered over time. The facility doesn't erase the losses — it buys Aave breathing room to work through the bad debt without disrupting the broader lending market.
Next steps for Aave's market
With the approval, Aave now has access to the ETH. The protocol will likely start drawing on the facility in the coming weeks. Whether the 30,000 ETH fully covers the bad debt — or if more action is needed — remains an open question. For now, the market is watching to see how quickly Aave can clean up the books and restore normal operations.
