Aave Restores WETH Borrowing on Six Networks, Returns LTVs to Pre-Exploit Levels

Aave has re-enabled borrowing against wrapped ether (WETH) after emergency restrictions introduced in the wake of a major exploit in April, bringing one of DeFi's most important collateral assets closer to normal operating conditions. Aave said it has restored WETH loan-to-value (LTV) parameters on Aave V3 across six networks—Ethereum Core, Ethereum Prime, Arbitrum, Base, Mantle and Linea—returning them to pre-incident settings under the rsETH technical recovery plan. Governance documentation lists the reinstated LTVs as 80.5% on Ethereum Core, 84% on Ethereum Prime, 80% on Arbitrum, 80% on Base, 80.5% on Mantle and 80% on Linea. WETH is now operating normally across these affected V3 markets. WETH is a tokenized version of ether widely used across DeFi for collateralized borrowing, leverage and liquidity strategies. Immediately after the exploit, Aave set WETH's LTV to 0% on impacted markets as a containment measure, effectively disabling it as collateral. Bringing LTVs back reopens borrowing capacity, improves capital efficiency and releases previously constrained liquidity across multiple ecosystems—signaling Aave's view that the most acute systemic risk is largely contained. The disruption originated with an attack on a bridge tied to Kelp DAO's rsETH, a yield-bearing restaked ether token. Attackers minted about $292 million of unbacked rsETH and used it as collateral to withdraw roughly $230 million in ETH from Aave. The exploit created around 112,103 unbacked rsETH in total. Liquidations and recovery measures have since retrieved approximately 106,993 of those tokens: 89,567 via Aave liquidations and 17,426 through Compound. That leaves an estimated gap of about 5,200 rsETH, which the industry coalition DeFi United has committed to cover. Even with WETH collateral capacity restored, legal disputes involving frozen assets and questions around ultimate liability remain unresolved. Aave's move points to reduced near-term contagion risk, while the ecosystem continues to work through the broader consequences of the rsETH bridge exploit. Reinstating WETH borrowing restores a core DeFi building block and should ease pressure on leverage and liquidity across the affected networks. Recovery progress is significant, though final remediation and the legal clean-up tied to the rsETH incident are still in progress.