Kelp DAO Completes rsETH Recovery Five Weeks After $293M Lazarus Group Hack

TLDR

• Kelp DAO has completed the operational phase of its rsETH recovery after the protocol was hacked for $293 million in April 2026 by North Korea’s Lazarus Group.
• The final tranche of 20,373.72 rsETH was transferred into the LayerZero OFT adapter, restoring cross-chain bridge coverage to 100%.
• The protocol’s live dashboard shows a 100.01% ETH backing ratio, meaning rsETH is now fully backed.
• Aave, one of the worst-affected protocols, helped fund the recovery but its total value locked has not recovered and remains around $14 billion, down from $26.4 billion.
• Minting, redemptions, and reward operations have been running normally since withdrawals reopened on May 14.

Ethereum liquid staking protocol Kelp DAO says it has completed the operational phase of its recovery plan for restaked Ether, five weeks after a $293 million hack attributed to North Korea’s Lazarus Group.

The protocol transferred the final tranche of 20,373.72 rsETH into the LayerZero OFT adapter on May 25. This adapter manages cross-chain token movement and liquidity across supported networks.

The transfer completed a broader refill process in which approximately 116,000 rsETH was replenished into the adapter over two weeks, with support from Aave and other protocols under the DeFi United initiative.

Kelp’s live dashboard now shows a 100.01% ETH backing ratio and full bridge lockbox coverage across both LayerZero and Chainlink infrastructure.

The protocol said minting, redemption, and reward operations have been running normally since withdrawals were reopened on May 14.

What Happened in the April Hack

On April 18, the Lazarus Group exploited the Kelp DAO protocol, stealing 116,500 rsETH worth roughly $293 million.

The attacker then used a large portion of those stolen tokens as collateral on Aave’s lending platform to borrow wrapped Ether. This left Aave with $190 million in bad debt and triggered a wave of withdrawals.

Aave’s total value locked fell from $26.4 billion to below $14 billion as a result, losing its position as the largest DeFi protocol by TVL.

The Kelp DAO hack was one of 25 crypto hacks recorded in April. Combined losses that month reached $630 million, making it the worst month since Bybit was hacked for $1.5 billion in February 2025.

Aave Has Not Recovered

Net outflows from Aave’s lending markets have eased over the past month, according to DefiLlama data.

However, Aave’s TVL has shown no signs of recovery. It has been hovering between $13.9 billion and $15.1 billion since about a week after the hack took place.

The first tranche of 25,000 rsETH was transferred on May 13, allowing rsETH bridging between Ethereum mainnet and layer 2 networks to reopen.

Kelp says the operational phase of the recovery is now closed. The broader challenge of rebuilding user confidence remains.

Recent months have made investors more sensitive to bridge security, backing transparency, and solvency across restaking platforms.

Protocols have responded by investing more in real-time reserve dashboards, proof-of-backing systems, and publicly trackable recovery wallets.

KelpDAO has pointed users to its live dashboard as evidence the system is operating normally and that rsETH is fully backed.

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