hodler

8 May 2026, 03:40

Arbitrum Council Approves Unfreezing $71M in ETH From Kelp DAO Exploit

BitcoinWorld Arbitrum Council Approves Unfreezing $71M in ETH From Kelp DAO Exploit The Arbitrum Security Council has approved a joint proposal to unfreeze approximately $71 million in ETH that was locked following an exploit on the Kelp DAO protocol. The decision is expected to accelerate the recovery of rsETH collateral and restore liquidity for affected users. Background of the Exploit and Freeze In early 2025, an exploit targeting Kelp DAO, a liquid restaking protocol, led to the freezing of a significant amount of ETH by the Arbitrum Security Council. The council, which acts as a safety mechanism for the Arbitrum ecosystem, intervened to prevent further loss and to allow time for investigation and remediation. The frozen funds, valued at around $71 million at current market rates, were held in a smart contract while stakeholders worked on a recovery plan. Joint Proposal and Approval Process The successful proposal was jointly submitted by three key entities: Aave Labs, the development team behind the Aave lending protocol; Kelp DAO, the affected protocol; and LayerZero, the cross-chain interoperability platform. The collaboration was necessary because the frozen funds were intertwined across multiple protocols and layers, requiring coordinated action to safely unfreeze and redistribute them. The proposal underwent a standard governance process, including a voting period and technical review, before receiving final approval from the Arbitrum Security Council. The council’s decision was based on the thoroughness of the recovery plan and the assurance that the exploit vector had been addressed. Impact on rsETH Collateral and Users The unfreezing of these funds is a critical step in restoring the rsETH collateral pool. rsETH is a liquid restaking token that represents staked ETH on the EigenLayer ecosystem. The exploit had temporarily destabilized the collateral backing, causing uncertainty for users who had deposited ETH in exchange for rsETH. With the funds now being released, Kelp DAO can begin the process of rebalancing its reserves and resuming normal operations. This move is expected to restore confidence among liquidity providers and borrowers who rely on the stability of rsETH. Broader Implications for DeFi Security This incident highlights the importance of security councils and rapid response mechanisms in decentralized finance. The Arbitrum Security Council’s ability to freeze and later unfreeze funds, with proper governance, demonstrates a balanced approach between security and decentralization. However, it also raises questions about the centralization of power in such councils, even if temporary. The joint proposal model, involving affected protocols and infrastructure providers, could become a template for handling future cross-protocol incidents. Conclusion The approval to unfreeze $71 million in ETH marks a positive resolution to a significant DeFi exploit. The coordinated effort between Aave Labs, Kelp DAO, and LayerZero, combined with the decisive action of the Arbitrum Security Council, has set a precedent for how the ecosystem can manage and recover from security incidents. Users and stakeholders will now watch closely as the funds are redistributed and normal operations resume. FAQs Q1: What was the Kelp DAO exploit? The Kelp DAO exploit was a security breach that targeted the protocol’s smart contracts, leading to the freezing of approximately $71 million in ETH by the Arbitrum Security Council to prevent further losses. Q2: Who submitted the proposal to unfreeze the funds? The proposal was jointly submitted by Aave Labs, Kelp DAO, and LayerZero, representing a collaborative effort between the affected protocol, a major lending platform, and a cross-chain infrastructure provider. Q3: What is rsETH and why is this important? rsETH is a liquid restaking token on the EigenLayer ecosystem. Unfreezing the funds is crucial for restoring the collateral backing of rsETH, ensuring stability for users who have deposited ETH in exchange for the token. This post Arbitrum Council Approves Unfreezing $71M in ETH From Kelp DAO Exploit first appeared on BitcoinWorld .

7 May 2026, 21:43

Arbitrum approves $71 million ETH unlock with 90 percent support

🟢 Arbitrum votes to unlock $71 million in frozen ETH. Over 90 percent of participants backed the proposal in $ARB. Continue Reading: Arbitrum approves $71 million ETH unlock with 90 percent support The post Arbitrum approves $71 million ETH unlock with 90 percent support appeared first on COINTURK NEWS .

7 May 2026, 21:10

Proposal to Unfreeze $71M in Kelp DAO Funds on Arbitrum Nears Final Approval

BitcoinWorld Proposal to Unfreeze $71M in Kelp DAO Funds on Arbitrum Nears Final Approval A joint proposal to unfreeze approximately $71 million in ETH, locked following an exploit of the liquid restaking protocol Kelp DAO, is expected to pass today. The measure, submitted collaboratively by Aave Labs, Kelp DAO, and LayerZero, has garnered sufficient support and now moves to the final on-chain governance stage on Arbitrum. Background of the Frozen Funds The funds were frozen by the Arbitrum Security Council after an exploit targeted Kelp DAO, a platform that allows users to deposit ETH and receive rsETH, a liquid restaking token. The security council’s intervention was a preventive measure to protect user assets while the nature and extent of the exploit were assessed. The freezing of such a large sum — roughly $71 million in ETH — temporarily halted withdrawals and created uncertainty among rsETH holders. The Joint Recovery Proposal The proposal, submitted by Aave Labs, Kelp DAO, and LayerZero, aims to restore a portion of the rsETH collateral through the DeFi United recovery project. The collaborative nature of the proposal highlights the interconnectedness of the decentralized finance ecosystem, where protocols often work together to resolve security incidents. Upon approval, the proposal will advance to the final on-chain governance stage, where Arbitrum token holders will vote to execute the unfreezing. Why This Matters for DeFi Users The passage of this proposal is a critical step toward restoring normal operations for rsETH holders. It signals a coordinated effort among major DeFi protocols to address security breaches and protect user funds. For the broader market, it demonstrates the effectiveness of security councils and governance mechanisms in managing crises, potentially reinforcing trust in the Arbitrum ecosystem and liquid restaking protocols like Kelp DAO. Implications for the Market The unfreezing of $71 million in ETH could have a calming effect on the market, reducing the immediate selling pressure that often accompanies such incidents. It also sets a precedent for how multi-protocol recovery efforts can be structured, which may influence future incident response plans across DeFi. Investors and analysts will be watching the on-chain vote closely, as its success could pave the way for similar collaborative resolutions in the future. Conclusion The near-certain approval of the proposal to unfreeze $71 million in Kelp DAO funds marks a significant milestone in the aftermath of the exploit. The joint effort by Aave Labs, Kelp DAO, and LayerZero underscores the importance of cooperation in the DeFi space. As the final on-chain vote approaches, the community awaits the restoration of rsETH collateral and a return to normalcy for affected users. FAQs Q1: What is the Arbitrum Security Council? The Arbitrum Security Council is a group of trusted entities responsible for taking emergency actions, such as freezing funds, to protect the Arbitrum network and its users during security incidents. Q2: What is rsETH? rsETH is a liquid restaking token issued by Kelp DAO. It represents a user’s deposited ETH that is being restaked to secure other protocols, allowing users to earn additional yields while maintaining liquidity. Q3: How will the unfrozen funds be used? Upon approval, the unfrozen ETH will be used by the DeFi United recovery project to restore a portion of the rsETH collateral, helping to stabilize the protocol and enable withdrawals for affected users. This post Proposal to Unfreeze $71M in Kelp DAO Funds on Arbitrum Nears Final Approval first appeared on BitcoinWorld .

7 May 2026, 17:40

Ethereum DeFi Dominance Slips: TVL Share Drops Below 54%

BitcoinWorld Ethereum DeFi Dominance Slips: TVL Share Drops Below 54% Ethereum’s (ETH) share of the total value locked (TVL) across decentralized finance protocols has dipped below 54%, according to data from Unfolded. This marks the lowest level for the leading smart contract platform since May 2025, signaling a notable shift in capital allocation within the DeFi ecosystem. A Gradual Decline in Market Share The decline in Ethereum’s DeFi TVL share has been a gradual trend over recent months. While Ethereum remains the dominant chain by a significant margin, its relative position is eroding as capital flows into alternative layer-1 blockchains and layer-2 scaling solutions. Competitors like Solana, Arbitrum, and Base have seen their TVL shares increase, attracting liquidity with lower transaction fees and faster finality. According to DeFiLlama, Ethereum’s TVL currently stands at approximately $48 billion, a figure that has remained relatively stable in absolute terms. The drop in percentage share is therefore more a reflection of the growth occurring on other networks rather than a net outflow from Ethereum itself. Why This Matters for the Crypto Market Ethereum’s TVL share is a key metric for assessing the network’s competitive position in the DeFi space. A declining share does not necessarily indicate weakness, but it does highlight the increasing fragmentation of the DeFi landscape. For investors and developers, this shift underscores the importance of a multi-chain strategy. Implications for Ethereum’s Long-Term Position The trend raises questions about Ethereum’s ability to retain its status as the default settlement layer for DeFi. While the network benefits from deep liquidity, established infrastructure, and a robust developer community, the rise of high-throughput alternatives is providing genuine competition. The successful implementation of EIP-4844 and ongoing scaling improvements are expected to bolster Ethereum’s competitiveness, but the market is clearly diversifying. Conclusion Ethereum’s DeFi TVL share falling below 54% is a significant data point, reflecting a maturing and increasingly multi-chain DeFi ecosystem. While Ethereum remains the market leader, the trend warrants close observation as capital continues to seek efficiency across different blockchain environments. FAQs Q1: What does TVL mean in DeFi? TVL, or Total Value Locked, represents the total amount of assets deposited in a blockchain’s DeFi protocols. It is a key indicator of a network’s usage and capital inflow. Q2: Why is Ethereum’s TVL share declining? The decline is primarily due to the rapid growth of competing layer-1 and layer-2 networks that offer lower fees and faster transactions, attracting liquidity away from Ethereum. Q3: Is this decline a negative sign for Ethereum? Not necessarily. While it indicates increased competition, Ethereum’s absolute TVL remains high. The shift reflects a natural diversification of the DeFi market rather than a fundamental flaw in Ethereum’s technology. This post Ethereum DeFi Dominance Slips: TVL Share Drops Below 54% first appeared on BitcoinWorld .