⚡️ Friends, this time with Aave, it’s probably mostly ordinary people filling the hole in the end. When Stani said on X that this was his lifelong career, I felt something was off.

Usually, when founders say this kind of thing, it’s not just sentimentality; they really can’t handle it anymore. On April 23rd, he personally put in 5,000 ETH, over ten million dollars.
The incident started six days ago: someone hacked KelpDAO’s cross-chain bridge, exploiting a vulnerability to generate fake rsETH out of thin air. These fake tokens were used as collateral on Aave, borrowing nearly $200 million worth of ETH.
Aave is the largest lending protocol in DeFi, managing over $30k in user assets. Once the news broke, the big players were the first to run. In six days, deposits evaporated by $15 billion, and the core pools were drained.
Now, the utilization rate of the USDC and USDT pools is still close to 100%. The money you deposit can’t be withdrawn anymore.
This led to the so-called DeFi United, which, frankly, is the entire industry pooling resources to fill the hole.
Currently, the parties who have expressed willingness to contribute include Lido, EtherFi, Golem, Mantle, plus Stani. But don’t celebrate too early. Lido said they are willing to contribute 2,500 stETH, but only if the entire plan is funded first. EtherFi’s 5,000 ETH is still under vote. Mantle’s 30k ETH is a loan, and discussions are ongoing. The only contributions that are 100% confirmed are Stani’s 5,000 ETH and Golem’s 1,000 ETH.
How big is the gap? The hacker borrowed nearly 100k ETH in total. The Arbitrum Security Council helped freeze 30k ETH, leaving a shortfall of about 68.9k ETH, roughly $160 million. Even if all the above parties pay up, only 43.5k ETH will be covered, leaving 25k ETH unaccounted for.
Does this scene sound familiar? The 2008 TARP: Wall Street messes up, and the government steps in to organize everyone to chip in and cover the losses. DeFi United’s structure is almost identical. But the difference is huge: TARP was backed by the Treasury Department and the Federal Reserve, with the power to enforce allocations and print money. This time, it’s entirely voluntary crowdfunding, with no one having the authority to force anyone to pay.
So why are competitors willing to chip in? Because rsETH has already penetrated too many protocols. Just Aave alone holds 83% of the circulating supply. If it completely blows up, everyone will have a bad time. Saving Aave is essentially saving themselves.
But the most ironic part is yet to come. Regardless of whether DeFi United can raise the funds in the end, the ultimate payers are already decided: those ordinary deposit users who did nothing but store some ETH to earn a few points of interest.
They initially just deposited some ETH, hoping to earn a little interest. They probably don’t even know what KelpDAO is, nor are they aware of the vulnerabilities in LayerZero’s message verification mechanism. As a result, the borrowed money by the hacker is owed by their counterparties.
Now, the Aave governance forum is discussing: if the funds can’t be raised, how will the bad debt be distributed among users? The minimum is $123 million, the maximum $230 million. Users have no voting rights on this, not even the chance to refuse.
And Circle’s chief economist even suggested raising the lending rate cap to 50%, using more expensive money to fill deeper holes.
After 2008, the world spent over a decade building deposit insurance, stress testing, and systemic risk regulation, with one core goal: to prevent ordinary depositors from footing the bill for institutional mistakes. DeFi has bypassed this system for ten years, but what was supposed to happen has happened—runs, contagion of bad debt, innocent people locked inside—and it’s all happening now.
As of today, the available liquidity in the USDC pool on Aave is less than $3 million. If you deposit money and want to withdraw, chances are you still can’t.
Whether DeFi or CeFi, I sincerely hope this time ordinary people won’t have to pay the price again. But honestly, I’m not very hopeful.