Lido Labs proposes using 2,500 STETH to support DeFi rescue

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CoinWorld news reports that Lido Labs has requested Lido DAO approval to use up to 2,500 STETH, worth approximately $5.8 million, to help reduce RETH shortages caused by the Kelp attack. The proposal states that these funds will not be used for a full bailout, but as part of a broader recovery plan aimed at covering the RETH deficit. The Kelp RETH LayerZero attack caused a substantial RETH support shortfall and triggered secondary impacts on integrated DeFi platforms. The attack led to a nearly $8 billion reduction in AAVE’s total value locked, leaving around $195 million in bad debt. Lido Labs said the response should remain narrow and coordinated, noting that the Lido DAO has a reasonable interest in supporting a coordinated response; otherwise, inaction could increase losses for EarnETH liquidity providers. The complete deficit exceeds 100,000 ETH, and multiple crypto projects and stakeholders are expected to jointly fund the recovery work. The EtherFi Foundation and AAVE founder Stani Kulechov have also offered additional support. These measures show that the Kelp attack has prompted a broad response from DeFi participants.

STETH-0.59%
AAVE2.07%
ETH-0.94%
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