Ethereum Foundation Swaps aWETH For wstETH
The 21,269 aWETH-to-wstETH swap reduces Lido EarnETH's WETH debt on Aave by ~20,000 WETH after the KelpDAO exploit drove utilization to peak levels.
The Ethereum Foundation exchanged 21,269 aWETH from its Aave lending position for 17,254 wstETH in a transaction with Mellow and Lido Finance. Mellow is a vault curator for Lido's EarnETH vault, which generates yield through looping strategies, where it borrows WETH against wstETH collateral to multiply staking exposure.
The KelpDAO exploit drove Aave's WETH market to peak utilization, causing borrowing rates to spike sharply and hurting previously profitable vault positions. Mellow obtained aWETH to pay back the vault's WETH debt on Aave without needing to sell wstETH on the open market. The swap brought EarnETH's outstanding WETH debt on Aave from approximately 82,000 to 62,000 WETH, improving the vault's health factor. Disclosure: Lido is a current sponsor of ETH Daily.
EarnUSD is a stablecoin vault by Lido for earning transparent, onchain USD-denominated rewards. Get started today at stake.lido.fi/earn
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DeFi United Relief Vehicle For rsETH
Aave service providers pledge 13,500+ ETH toward covering rsETH's 118,000 ETH shortfall from the KelpDAO exploit.
Aave service providers have launched a deficit relief initiative called DeFi United, designed to fully cover the underbacked rsETH liquid staking token from KelpDAO. The initiative includes contribution pledges from several ecosystem projects: EtherFi has committed 5,000 ETH, Lido 2,500 ETH, and Golem 1,000 ETH.
Aave founder Stani Kulechov also personally pledged 5,000 ETH (approximately $11.6 million), emphasizing that Aave represents his life's work. Additional participants, including Ethena, Ink Foundation, Tydro, and LayerZero, have announced participation, though have not specified their contribution amounts.
The rsETH asset is facing an estimated shortfall of 118,000 ETH following the KelpDAO exploit executed by the DPRK. Arbitrum also recovered 30,000 ETH connected to the exploit, which could be directed toward DeFi United. 75,700 ETH has already been swapped by the DPRK via THORChain. Kulechov called for THORChain to contribute the roughly $450,000 in swap fees generated from those transactions to support DeFi United.
EarnUSD is a stablecoin vault by Lido for earning transparent, onchain USD-denominated rewards. Get started today at stake.lido.fi/earn
Disclaimer: Content is for informational purposes only, not endorsement or investment advice. The accuracy of information is not guaranteed.