Key Takeaways
Mantle’s community has approved providing Aave DAO a credit line of up to 30,000 ETH to address bad debt from an exploit on its V3 Ethereum market.
The vote on proposal MIP-34, which concluded Friday, authorizes the Mantle Foundation to negotiate the final terms of the facility with Aave DAO, according to the official snapshot proposal page. The move represents one of the largest cross-protocol rescue packages in DeFi history.
The bad debt stems from an April incident where an attacker deposited unbacked rsETH, a liquid restaking token from Kelp DAO, and borrowed approximately $190 million in other assets. The exploit left a shortfall estimated between $123.7 million and $230.1 million. The event pushed utilization on Aave’s WETH market above 99 percent for nearly 13 days, severely constraining liquidity for users, according to data from Aavescan and analysis by Galaxy Research.
While the 30,000 ETH facility provides a critical backstop, it only partially covers the total estimated shortfall. The next step involves formal negotiations between the two DAOs to finalize terms, which include a maximum 36-month duration and an interest rate of LIDO + 1 percent APR. The move is being watched as a key test of the DeFi ecosystem's ability to self-remediate major security incidents without traditional financial intermediaries.
This article is for informational purposes only and does not constitute investment advice.
