AAVE to transfer 25,000 ETH to DeFi United after Kelp DAO exploit

Aave plans to send 25,000 ETH to DeFi United to address fallout from the Kelp DAO exploit. The “Another crypto hack over $100m by December 31” market sits at 100% YES.

An attacker minted 116,500 unbacked rsETH in the Kelp DAO exploit, the largest hack of 2026 so far, leaving bad debt estimated at $124-230 million on Aave alone. Aave responded by freezing rsETH markets and proposing the 25,000 ETH transfer. The market for another crypto hack over $100m by December 31 is fully priced at 100% YES, with traders treating the Kelp DAO exploit as clearly qualifying.

The Ethereum reaching $10,000 by December 31, 2026 market remains at 4.2% YES, showing minimal movement from the hack. The Ethereum price market saw just $28 in actual USDC traded, with a $1,029 order book depth required to move the price 5 percentage points. The hack prediction market shows no recent volume, suggesting traders had already priced in an event of this kind.

Aave’s intervention raises two competing dynamics. Coordinated recovery efforts like this can limit damage from exploits and restore confidence in affected protocols. On the other hand, bailouts create moral hazard: if protocols expect to be made whole after exploits, risk management standards may slip. A YES share in the Ethereum market at 4.2¢ pays $1 if the price target is hit, a 23.8x return.

Watch for further announcements from Aave and DeFi United, and any regulatory responses to the exploit. Both will shape how the recovery plays out and whether additional protocol interventions follow.

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