Gate News message, April 24 — Lido Labs is seeking DAO approval to allocate up to 2,500 staked Ethereum (stETH), worth approximately $5.8 million, to help reduce the rsETH deficit caused by the recent Kelp exploit, according to a proposal posted Thursday.

The Kelp DAO rsETH bridge exploit last week resulted in a roughly $292 million loss and triggered widespread market disruption. Aave's total value locked (TVL) fell by nearly $8 billion after attackers used stolen Kelp-linked assets as collateral, leaving approximately $195 million in bad debt. Lido said the contribution would help address "market rates pressure, elevated borrow/lending stress, and the risk of forced unwinds for users exposed through vaults and looping strategies." The total rsETH deficit exceeds 100,000 ETH.

Lido emphasized the allocation would only be made as part of a fully funded recovery package and expects multiple projects to contribute. Shortly after Lido's proposal, the EtherFi Foundation proposed contributing 5,000 ETH for relief. Additionally, Aave founder and CEO Stani Kulechov announced he would personally donate 5,000 ETH to Aave's DeFi United relief fund.

The exploit has sparked industry debate on DeFi security and accountability. Curve founder Michael Egorov and JPMorgan analysts have highlighted concerns that repeated hacks and centralized points of failure are damaging institutional confidence in decentralized finance.