$293M Hack Reversed — Kelp DAO Recovers RsETH in Five Weeks
By John Nada·May 26, 2026·2 min read
Kelp DAO restored rsETH after a $293M hack by the Lazarus Group, a five-week effort highlighting DeFi's resilience and risks.
20,373.7 rsETH — that's the final batch that Kelp DAO sent out to signal its comeback from a staggering $293 million hack. The Ethereum liquid staking protocol emerged after a five-week recovery marathon, patching up its system post-exploit by North Korea's infamous Lazarus Group. According to Cointelegraph, Kelp DAO declared the operational phase of its recovery plan finished as it secured the rsETH with LayerZero's smart contracts.
What does this mean in plain terms? Kelp DAO's restaked Ether is back to business. But the refloating hasn't been an isolated effort. The DeFi United initiative saw various crypto protocols rallying to patch the financial gap, demonstrating a solidarity that echoes across the decentralized finance landscape.
Kelp's woes last April rippled across the broader crypto lending markets, shaking liquidity foundations. Aave felt the tremors sharply when the attacker used 116,500 rsETH as collateral on its platform, piling up $190 million in bad debt and sparking a withdrawal frenzy. The hack wasn't just an isolated incident; it was one of 25 hacks that month, collectively bleeding $630 million — a grim reminder of February 2025's record-breaking Bybit breach.
ETF Flows Shift Focus—Gold Outshines Bitcoin as Uptrend Snaps
Investor flows pivot sharply as gold ETFs attract $2.
Yet, there's a silver lining for Kelp. The initial tranche of 25,000 rsETH, transferred on May 13, reopened bridges between the Ethereum mainnet and layer 2 networks. Cointelegraph notes that this enabled Kelp to greenlight rsETH withdrawals the next day, with its minting, redemptions, and rewards returning to normal.
Aave, however, isn't out of the woods. Its total value locked (TVL) saw a drastic fall from $26.4 billion to below $14 billion, knocking it off the top DeFi protocol perch. While Cointelegraph points out that net outflows eased in the past month, Aave's TVL remains stagnant, hovering between $13.9 billion and $15.1 billion — a far cry from its peak.
The Kelp DAO saga underscores the fragility and interconnectedness of decentralized finance. It's one thing to rebuild; it's another to regain trust in a system where fortunes can disappear in a hack's wake.