rsETH Supply Caps Updated — Precautionary Measure Supply caps for rsETH have been set to 1 on both Core and RIZ markets on Arbitrum. This follows a bad debt situation affecting rsETH across multiple lending protocols industry-wide. Existing positions are not impacted. All other markets are operating normally.

The rsETH markets on Aave V3 and Aave V4 have been frozen. Aave's contracts have not been exploited and this is an exploit related to rsETH. The freeze follows an exploit of the Kelp DAO rsETH bridge. Freezing the rsETH markets prevents new deposits and borrowing against rsETH collateral while the situation is assessed. We are reviewing information about rsETH borrows on Aave that occurred after the exploit and will share more details as soon as possible. If the protocol accumulates bad debt from this incident, we'll explore paths to offset the deficit.

An update on the rsETH incident involving @KelpDAO. To our Mantle community, ecosystem builders, and partners, following our initial statement earlier this week, we want to share where things stand, what has been confirmed, and how we are moving forward. 1. Mantle remains fully secure. Our underlying network, official bridges, and core assets have not been compromised. @LayerZero_Core has confirmed in its KelpDAO Incident Statement that the exploit was isolated entirely to KelpDAO's rsETH configuration, with zero contagion to any other asset or application. The attacker did not interact with Mantle contracts or Mantle markets at any point. The localized liquidity pressure observed in recent days reflects spillover from that third-party cross-chain vulnerability, not any issue with Mantle's infrastructure. The protective pauses outlined in our prior statement remain in place and will be lifted once our team and ecosystem partners confirm it is appropriate to do so. 2. The Mantle ecosystem is resilient. Since April 18, capital has been steadily flowing back into the Mantle ecosystem. Onchain data shows cumulative repayments across core USD assets have reached approximately $204 million within 48 hours. Liquidity conditions continue to normalize, and the strength of the recovery speaks to the depth and resilience of the Mantle community. 3. Mantle is standing together with our ecosystem. Mantle is in active coordination and communication with the @aave team and affected protocols on a coordinated recovery plan, including potential treasury participation. We will continue to share meaningful updates as the situation develops. Through moments like these, Web3's strength shows how we stand together. That's where we are, and where we'll remain. We stand firmly with our builders. Thank you for standing with us. Stay safe.

In response to the KelpDAO rsETH incident, Euler has liquidated the attacker’s remaining positions on Ethereum. Collateral recovered through those liquidations has been moved to the Euler DAO operational multisig while next steps are assessed. No other user positions were affected by this action.

We’re fully aware of the rsETH exploit and have been in active remediation with the @KelpDAO team since the incident and continue to monitor. All other applications remain safe. We are still identifying the root cause alongside @_SEAL_Org and others. We will publish a complete post-mortem with @KelpDAO as soon as we have all information.

NAVI has no exposure to the KelpDAO rsETH incident on Ethereum. As a precautionary measure, we are temporarily limiting new Layerzero wBTC supply and borrow while the LayerZero bridge issue is being investigated and resolved.

$200M was drained from Aave's rsETH markets following an exploit of Kelp's LayerZero bridge earlier today. The exploiter deposited rsETH, and borrowed 83,427 WETH and wstETH from Aave. The breakdown of extracted assets across Aave instances is: Ethereum 52,834 WETH Arbitrum 29,782 WETH 821 wstETH At the time of writing: - Aave rsETH markets are frozen. - No other LayerZero OFT token was affected. We are assisting multiple teams in investigating the root cause and the full path the funds took after extraction. A longer investigative report will follow soon.

We've published a security blog post on the recent rsETH incident. The post details what happened, our response, and the design decisions made beforehand that protect USDe. Read it below.

As a precautionary measure in response to the ongoing KelpDAO / rsETH incident, Midas has paused all mToken minting and redemptions. Midas smart contracts are unaffected. We are monitoring the situation and will share updates on our official channels as they develop.