Arbitrum DAO Moves to Release 30,766 ETH as DeFi United Gains Momentum

• Arbitrum DAO votes to unlock frozen ETH for recovery initiative
• DeFi United gains traction as millions in support flow in
• Kelp DAO exploit aftermath drives coordinated response across DeFi platforms

Arbitrum token holders are considering a proposal to release 30,766 ETH that the Security Council froze after the Kelp DAO exploit disrupted the ecosystem. Early voting activity indicates strong support, with 16.9 million ARB tokens backing the proposal within the first hour, while no opposing votes have emerged so far. The vote will remain open until May 7, giving participants time to weigh the implications of releasing the funds.

This proposal seeks to channel the recovered assets into DeFi United, a coordinated initiative created to stabilize liquidity conditions following the attack. The move reflects a broader effort within decentralized finance to respond quickly and collectively when major disruptions occur. Moreover, the initiative has already gained traction among key industry players who aim to restore confidence in affected protocols.

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On April 20, the Security Council froze approximately $71.1 million worth of ETH that the attacker had transferred to an Arbitrum One address. Authorities had provided input regarding the suspected identity behind the exploit, which influenced the council’s decision to intervene. Consequently, the funds were moved to a controlled address that requires governance approval before any release can take place.

Days before the freeze, attackers exploited a cross-chain vulnerability within Kelp DAO, draining about $292 million in assets and significantly impacting its operations. This amount represented nearly 18% of rsETH’s circulating supply, intensifying concerns across the ecosystem. After the exploit, the attacker moved assets into lending platforms such as Aave, Compound, and Euler to maximize capital use.

DeFi United Coordinates Industry Response

The attacker used these assets as collateral to borrow large sums, creating roughly $236 million in debt exposure across multiple platforms. As a result, several protocols paused certain markets or contracts to contain further risks and limit potential losses. Meanwhile, the Security Council exercised emergency powers through a 9-of-12 approval vote to freeze the address linked to the exploit.

DeFi United has since mobilized over $311 million in contributions and loans, highlighting strong support from across the industry. Arbitrum’s potential contribution would become the largest allocation to the initiative if the vote passes. Other commitments include 30,000 ETH from Consensys and Joseph Lubin, alongside a 30,000 ETH loan from Mantle.

Additional support has come from LayerZero, which committed 5,000 ETH and plans another 5,000 ETH deployment on Aave. Kelp DAO has also contributed 2,000 ETH as part of the recovery effort.

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