BlockBeats report, May 9: Aave has announced the second phase of its technical recovery plan for the rsETH incident. On April 28, Aave unveiled its V3 technical recovery solution for the rsETH hacking event, which has since made significant progress on Ethereum Core and Arbitrum. On May 6, eight Aave V3 positions belonging to the attacker were successfully liquidated, and the recovered rsETH collateral has been transferred to the Recovery Guardian in accordance with AIP. Other users, including Umbrella stakers, remain unaffected. Meanwhile, governance proposals from both Mantle DAO and Arbitrum DAO have been approved; the latter has agreed to return the $71 million in ETH recovered by the Security Council to Aave for use in the DeFi United joint recovery initiative. Legal developments are also progressing positively: a court has ordered Arbitrum DAO to transfer the frozen ETH to Aave LLC via on-chain voting, with an injunction to follow upon transfer; Aave LLC is currently awaiting the final ruling. As a temporary measure, the team has borrowed additional funds to cover any shortfall, ensuring users are not impacted by delays.
The next phase of the recovery plan will address the rsETH overissuance issue and restore normal market operations. On Arbitrum, rsETH obtained from liquidations will be burned, and KelpDAO will simultaneously burn the corresponding LayerZero cross-chain message packets, completely eliminating the excess rsETH supply created by the attack. On Ethereum, seized rsETH will be transferred to the bridge vault and combined with ETH pledged by the DeFi United alliance to fully back the vault; once backing is complete, the bridge will resume normal operations. rsETH withdrawals will then be reopened, and protocol parameters temporarily adjusted for liquidations will be reverted. Remaining affected positions will be closed out using raised funds in the form of ETH. Additionally, the LTV parameter for WETH on Aave V3 Ethereum Core will be restored to normal shortly. The compensation inquiry tool is now live, allowing users affected by the rsETH incident to view their expected compensation amounts.