Arbitrum’s governance is moving forward with releasing 30,765 ETH (valued at $71 million) frozen by the Security Council after the Kelp DAO exploit, with snapshot voting showing overwhelming support at 90.5% approval. The thaw is part of a coordinated cross-protocol recovery effort led by DeFi United, a coalition including Aave Labs, LayerZero, EtherFi, and Compound that has pledged 43,000 ETH ($101 million) to restore backing for rsETH, the liquid restaking token affected by the April attack.
The Kelp Exploit and Emergency Response
On April 21, Arbitrum’s Security Council froze 30,765 ETH after an attacker drained approximately 116,500 rsETH from Kelp DAO in the preceding days. The exploit affected a protocol worth roughly $290-293 million in rsETH collateral at the time. The frozen ETH represented one critical piece of a broader liquidity crisis: the attack created a gap between rsETH circulating supply and its Ether backing. Aave Labs, LayerZero, EtherFi, and Compound jointly authored the proposal to release the frozen funds as the foundation for recovery.
Governance Numbers and Coalition Commitments
The snapshot vote, scheduled to conclude May 7 at 6:54 pm UTC, shows 173.9 million ARB voting in favor, with 18.1 million ARB abstaining and just 1,700 ARB against. The vote margin signals protocol-level consensus on the recovery path. DeFi United members have committed 43,000 ETH toward restoring rsETH backing, but even this substantial pledge leaves a projected shortfall of 76,127 rsETH ($174.5 million). A separate proposal to allocate 6,000 ETH ($14 million) from Arbitrum’s treasury passed with 99.9% approval, generating an estimated 288 ETH in annual yield ($625,000).
From Snapshot to Binding Governance
The snapshot vote is not final. Arbitrum’s governance process requires a temperature check snapshot, followed by an onchain Constitutional AIP vote via Tally. This structure ensures the community signal translates into executable code before funds move. The governance framework reflects Arbitrum’s two-tier approach: off-chain signaling followed by binding onchain authority. A concurrent ETH allocation proposal voting closes Friday, May 8 at 2:22 pm UTC, running parallel to the primary recovery effort.
The Remaining Backing Gap
Even with DeFi United’s 43,000 ETH commitment and the treasury allocation, rsETH faces a $174.5 million backing shortfall. Mantle, Lido DAO, Ethena, Golem Foundation, Ink Foundation, and Tydro are among additional pledgers supporting the recovery. The governance vote unlocks the first tranche of frozen capital, but the protocol must address how the remaining gap closes—whether through additional pledges, protocol-level restructuring, or user recovery mechanisms. The onchain Constitutional AIP will clarify execution details.
