LayerZero has finally decided to join the DeFi United initiative established to heal the wounds of the $292 million Kelp DAO hack. In the announcement made on Tuesday, the crypto infrastructure provider is donating 5,000 ETH and investing an additional 5,000 ETH to strengthen AAVE detailed analysis liquidity. With this step, LayerZero is providing a total of $23 million in support based on the ETH price of approximately $2,300 at the time of publication. The protocol will also take further measures to increase the liquidity of Aave’s native stablecoin GHO, as stated in its X post. Thus, it has concretized the industry-wide recovery plan it announced five days ago.
AAVE Recovery Plan Strengthened by LayerZero’s Contribution
The hack occurred on April 18 with a complex RPC poisoning attack on LayerZero Labs’ Decentralized Verifier Network; attackers forged cross-chain messages to release 107,000 unsupported rsETH from the Kelp bridge on Ethereum. These rsETHs flowed into debt positions on Aave, creating serious bad debt in the protocol. DeFi United, led by Aave, collected more than $300 million in ETH and stablecoins; a detailed technical recovery plan was made public. Accusations weigh heavily on LayerZero as KelpDAO used LayerZero Labs as the sole verifier. Arbitrum DAO is in the voting process for a 30,765 ETH contribution, Consensys and Joseph Lubin allocated 30,000 ETH, while Kelp DAO, Aave DAO, Stani Kulechov, Mantle, Circle, Puffer, and Lido are providing support.
LayerZero’s significant contribution elevates it to one of the largest supporters. While the Kelp DAO hack shook DeFi, total TVL dropped from $95 billion to $80 billion. Aave’s Ethereum TVL fell from $32 billion to $20.3 billion. This is a signal to review security and liquidity measures again.
Critical Support and Resistance Levels for AAVE
- Price: $97.01 | 24h Change: -0.07% | RSI: 48.54 (Neutral)
- Supports:
- S1: $95.57 (Strong, 67% score, -1.49% distance)
- S2: $86.34 (Strong, 66% score, -11% distance)
- Resistances:
- R1: $105.03 (Strong, 72% score, +8.26% distance)
- R2: $98.42 (Strong, 70% score, +1.45% distance)
- Trend: Downtrend | Supertrend: Bearish | EMA 20: $97.19
An ETH futures rally could support AAVE.
Frequently Asked Questions About the Kelp DAO Hack and AAVE
What role did LayerZero play in the hack?
Attackers tricked LayerZero’s DVN with RPC poisoning; Kelp used it as the sole verifier.
Why did AAVE TVL drop?
rsETH bad debt eroded liquidity; DeFi United is recovering with $300M+ raised.
Will AAVE price recover?
S1 $95.57 is strong support; R1 $105.03 target, ETH impact critical. Follow ZRO detailed analysis.
Source: https://en.coinotag.com/layerzero-provides-23m-support-to-aave-kelp-dao
