Aave Plans 25,000 ETH Transfer to DeFi United After Kelp DAO Exploit

CoinDesk reports that Aave intends to transfer 25,000 ETH to DeFi United as part of efforts to address fallout from the Kelp DAO vulnerability incident. In the exploit, attackers minted 116,500 unbacked rsETH, in what is being described as the largest hack of 2026 so far. Aave is estimated to face $124 million to $230 million in bad debt from the incident alone. The protocol has frozen the rsETH market and put forward the 25,000 ETH transfer proposal. Prediction markets rapidly treated the incident as satisfying the condition of "another cryptocurrency hack resulting in losses exceeding $100 million before December 31," with the market reading as 100% Yes and traders effectively marking the Kelp DAO exploit as a qualifying event. The impact on broader ETH pricing expectations appeared limited. The market for "Ethereum will reach $10,000 by December 31, 2026" priced at 4.2% Yes. Trading activity was minimal, with just $28 of USDC traded; order book data suggested about $1,029 of depth would be needed to move prices by 5 percentage points. The related prediction market has shown little recent volume, a sign traders had already priced in the possibility of such an event. Aave's response highlights competing forces: coordinated recovery actions can cap losses and stabilize confidence, while bailout expectations can increase moral hazard by weakening incentives for stringent risk controls. At the target price, Yes shares in the ETH market would pay $1 for every 4.2 cents, implying a 23.8x payout multiple. Investors are watching for further announcements from Aave and DeFi United, as well as any regulatory response tied to the exploit, which could shape the recovery path and determine whether additional protocol interventions follow.