Kelp DAO completes final rsETH recovery phase after $292M hack

Kelp DAO, the liquid restaking protocol that suffered a $292 million security breach earlier this year, announced on Wednesday that it has successfully completed the final stage of its rsETH recovery plan. The project transferred a final batch of 23,737.72 rsETH to its Omnichain Fungible Token (OFT) adapter, marking the end of a structured restoration process that began shortly after the exploit.

Recovery timeline and execution

In a post on X, Kelp DAO confirmed that it and the Aave protocol had replenished approximately 116,000 rsETH to the OFT adapter over the past two weeks. This final transfer completes the recovery phase, which was designed to restore user funds and re-establish normal operations following the attack that drained a significant portion of the protocol’s assets.

The incident, which occurred in early 2025, involved an exploit that targeted Kelp DAO’s cross-chain infrastructure. The project immediately paused operations and worked with security firms and partners to trace and recover funds. The structured recovery plan was announced shortly after, with phased transfers aimed at minimizing disruption to the broader DeFi ecosystem.

Operational status and collateralization

According to Kelp DAO’s statement, all core functions — including minting, redemption, and rewards distribution — are now operating normally. The project emphasized that rsETH remains fully collateralized, with no remaining exposure from the exploit.

This is a significant milestone for the protocol, which had faced intense scrutiny from the DeFi community following the hack. The successful recovery demonstrates the resilience of the project’s infrastructure and the effectiveness of its partnership with Aave, which played a key role in replenishing the affected tokens.

Implications for the DeFi ecosystem

The Kelp DAO recovery is being closely watched by the broader DeFi industry as a case study in post-exploit remediation. The structured approach — involving phased transfers, transparent communication, and collaboration with lending protocols — could serve as a template for other projects facing similar crises.

However, the incident also underscores persistent security vulnerabilities in cross-chain infrastructure. As DeFi protocols continue to expand across multiple blockchains, the attack surface for potential exploits grows correspondingly. Kelp DAO’s ability to fully restore user funds is a positive outcome, but it does not eliminate the underlying need for improved security standards across the industry.

Conclusion

Kelp DAO’s completion of the rsETH recovery phase marks the end of a challenging chapter for the protocol. With all functions restored and full collateralization confirmed, the project can now focus on rebuilding user trust and strengthening its security posture. For the DeFi ecosystem, the incident serves as both a cautionary tale and a demonstration of what effective crisis management can achieve.

FAQs

Q1: What was the Kelp DAO hack?
A: Kelp DAO suffered a $292 million security exploit in early 2025 that targeted its cross-chain infrastructure. The attack drained a significant portion of the protocol’s rsETH reserves, prompting an immediate pause in operations and the launch of a structured recovery plan.

Q2: How much rsETH was recovered?
A: Approximately 116,000 rsETH were replenished to the Omnichain Fungible Token (OFT) adapter over a two-week period, with the final batch of 23,737.72 rsETH transferred in the last phase. The project confirms that rsETH is now fully collateralized.

Q3: Are Kelp DAO’s operations back to normal?
A: Yes. All minting, redemption, and rewards functions are operating normally. The protocol has resumed full operations following the completion of the recovery plan.