Mantle, an Ethereum L2, published a governance proposal offering a loan of up to 30,000 ETH to Aave DAO to help address bad debt from the KelpDAO LayerZero exploit. The loan would carry a variable interest rate of the Lido staking yield rate plus 1% APR, with a maturity of up to 36 months and early repayment permitted without penalty.

The loan allows the Mantle Treasury to receive yield to generate a positive risk-adjusted return on unallocated treasury assets, with proceeds directed toward MNT burns or ecosystem funding. Mantle would also be delegated 130,000 AAVE tokens for governance participation during the loan period. The proposal is currently open for community discussion ahead of a formal Snapshot vote. The Aave v3 Mantle WETH market currently faces the largest estimated bad debt among all impacted markets.

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