Written by Ezra Reguerra, Staff Writer. Reviewed by Bryan O’Shea, Staff Editor.
Written by Ezra Reguerra, Staff Writer.
Reviewed by Bryan O’Shea, Staff Editor.
Mantle tokenholders approve 30K ETH Aave credit facility after rsETH exploit
Latest NewsPublishedMay 8, 2026
The credit facility would help Aave address bad debt created after the April rsETH exploit strained its WETH market.
Mantle tokenholders backed a proposal authorizing a credit facility of up to 30,000 Ether (ETH), worth about $68 million, for Aave DAO, advancing remediation tied to bad debt from the April rsETH exploit.
The proposal, MIP-34, passed in a seven-day Snapshot vote that ended Friday, as reported by DAO governance platform Snapshot. The measure authorizes the Mantle Foundation to negotiate and execute definitive agreements with Aave DAO for a loan from the Mantle Treasury, though the facility remains subject to Aave implementing its recovery plan and the parties finalizing terms.
The credit facility is intended to help address the impact of the rsETH incident on Aave V3. The proposal stated the attacker deposited 89,567 unbacked rsETH on Aave and borrowed about $190 million in WETH, wstETH and stablecoins, creating potential bad debt estimated at between $123.7 million and $230.1 million.
The vote comes as the fallout from the rsETH exploit has moved beyond the initial liquidity shock into a broader remediation phase, with Mantle positioning its treasury as a backstop while Aave works to address bad debt and restore confidence in its lending markets.
Source: Aave
Aave WETH market cools after post-exploit squeeze
The Mantle credit facility would address the shortfall that also created liquidity stress across Aave’s lending markets.
Galaxy Research stated in a Thursday report that the rsETH exploit pushed Aave’s Wrapped Ether (WETH) market into a prolonged squeeze, with WETH utilization staying above 99% for 12.7 days after the incident.
“Across the full analysis horizon, WETH utilization stayed structurally elevated and close to the 100% ceiling, with an average around 99.6% and only easing to about 98.47% by the end of the snapshot period,” Galaxy stated.
Related: Aave asks Arbitrum to send 30K ETH from Kelp exploiter to ‘DeFi United’
High utilization means most of the supplied asset has already been borrowed, leaving little idle liquidity available for immediate withdrawals. In Aave’s case, Galaxy stated the WETH market remained strained because supply contracted faster than borrows declined, keeping utilization near full capacity even after the initial shock.
30-day WETH utilization rate chart. Source: Aavescan
The market has since cooled from the near-100% levels described in Galaxy’s analysis. Aavescan data showed Aave’s Ethereum V3 WETH market at about 91.6% utilization on Friday, with roughly 2.02 million WETH supplied and 1.85 million WETH borrowed.
Magazine: North Korea denies crypto hacks, Upbit’s bank tests Ripple: Asia Express
Cointelegraph is committed to independent, transparent journalism. This news article is produced in accordance with Cointelegraph’s Editorial Policy and aims to provide accurate and timely information. Readers are encouraged to verify information independently.
- Aave
- DeFi
- Lending
- DAO
- Blockchain
More on the subject
Coinbase restores trading after AWS outage disrupts markets
11 hours ago
Ezra Reguerra
Mantle tokenholders approve 30K ETH Aave credit facility after rsETH exploit
13 hours ago
Ezra Reguerra
Polygon reduces block time to 1.75 seconds as payments push accelerates
May 7, 2026
Zoltan Vardai
Coinbase restores trading after AWS outage disrupts markets
11 hours ago
Ezra Reguerra
Mantle tokenholders approve 30K ETH Aave credit facility after rsETH exploit
13 hours ago
Ezra Reguerra
Polygon reduces block time to 1.75 seconds as payments push accelerates
May 7, 2026
Zoltan Vardai
