TheBlock reports that Kelp DAO and Aave will resume rsETH-related operations. The protocols previously suffered a major $292 million exploit, and recovery efforts are now making progress. This DeFi security incident once again highlights the risks facing liquid staking protocols.

Sources: TheBlock

Arbitrum DAO has voted to approve the release of approximately $70 million in ETH to recover funds related to the Kelp DAO incident. However, a May 1 court order restricted Arbitrum DAO from moving the recovered funds, prompting Aave to file an emergency application to lift the restrictions.

This marks an increasingly complex interaction between decentralized governance and the judicial system. The Arbitrum community had previously voted to recover funds transferred due to a Kelp DAO bridge vulnerability, but legal uncertainty has stalled the transfer process.

Aave’s emergency filing highlights the challenges DeFi protocols face when on-chain governance conflicts with off-chain legal frameworks. The court has yet to make a final ruling, and the timeline for fund release remains unclear.

The incident has sparked debate about the boundaries of DAO governance authority. While on-chain community voting expresses clear intent, judicial intervention shows that decentralized organizations still need to consider traditional legal constraints when handling major fund decisions.

Source: The Block

Kelp DAO has announced it is abandoning the LayerZero cross-chain protocol in favor of Chainlink’s cross-chain infrastructure, The Block reports.

This follows a $292 million exploit of a bridge associated with LayerZero. LayerZero previously blamed the breach on Kelp’s configuration setup, but Kelp countered that the configuration had been approved by LayerZero itself. The migration marks a broader reassessment of cross-chain security in the DeFi sector.