Aave Unveils Next Phase of Recovery Plan

Aave has released an update on its ongoing recovery efforts following the rsETH hack. According to the announcement, significant progress has been made in both Ethereum Core and Arbitrum.

The recovery plan involves several key steps, including the liquidation of attacker positions and the transfer of recovered rsETH collateral to a Recovery Guardian as per AIP (Aave Improvement Proposal).

On May 6th, 8 Aave V3 positions belonging to the attacker were successfully liquidated, with the recovered rsETH collateral being transferred to the Recovery Guardian.

The next phase of the recovery plan will focus on addressing the rsETH inflation issue and restoring normal market operations. On Arbitrum, the liquidated rsETH will be burned, and KelpDAO will simultaneously burn the corresponding LayerZero cross-chain message packet to completely eliminate excess rsETH supply resulting from the attack.

On Ethereum, the seized rsETH will be moved to a bridge locker, and in conjunction with the ETH committed by the DeFi United Alliance, the locker will be made whole. Once the backing is completed, the bridge will resume normal operations, allowing for rsETH withdrawals to be reopened.