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.

Update: Following the Kelp/rsETH exploit and resulting in likely bad debt on Aave V3's WETH reserve, 9Summits has withdrawn 100% of its Aave positions across all Lagoon vaults. We have no exposure to Kelp across all Lagoon vault we curate. All depositor funds are safe. We're monitoring the situation

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.

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.