LayerZero (ZRO) has committed 10,000 ETH (approximately $23-30 million) to the DeFi United initiative, a collective formed in the aftermath of the devastating KelpDAO hack. The donation, announced on April 28, 2026, aims to restore confidence and liquidity in the decentralized finance (DeFi) ecosystem.
The contribution is split into two parts: 5,000 ETH goes directly to DeFi United for recovery efforts, while the remaining 5,000 ETH is deposited into Aave to strengthen its liquidity pools. Additionally, LayerZero plans to take extra measures to deepen the liquidity of GHO, Aave’s native decentralized stablecoin.
The KelpDAO hack occurred on April 18, 2026, when attackers executed a sophisticated RPC-poisoning attack on LayerZero Labs' Decentralized Verifier Network (DVN). They forged a cross-chain message to release unbacked rsETH from Kelp's LayerZero-powered bridge adapter on Ethereum. Approximately 107,000 rsETH ended up in lending positions across Aave, generating substantial bad debt. The exploit drained around 12,000 ETH from the protocol.
LayerZero faced heavy criticism because KelpDAO used a 1-of-1 DVN setup with only LayerZero Labs as the verifier—a single point of failure. LayerZero claims it recommended multi-DVN redundancy, while Kelp says it used the default configuration. The donation is seen as a strategic move to rebuild reputation and demonstrate accountability.
DeFi United launched within 48 hours of the hack, coordinating recovery efforts across multiple blockchain networks. The initiative has now raised over $300 million in ETH and stablecoins from dozens of protocols and individuals. Notable contributors include Arbitrum DAO (pending vote to release 30,765 ETH), Consensys and Joseph Lubin (30,000 ETH), Mantle (30,000 ETH low-interest loan), Aave DAO (pending 25,000 ETH), Aave founder Stani Kulechov (5,000 ETH), Kelp (2,000 ETH), and Circle (buying AAVE tokens). Support also comes from Puffer, Lido, and others.
The hack has impacted DeFi wide. According to The Block data, total value locked (TVL) across the sector dropped from ~$95 billion before the hack to $80 billion. Aave alone saw its Ethereum mainnet TVL decline from $32 billion to $20.3 billion.
Industry experts view the donation as a critical step. Dr. Elena Marchetti, a blockchain security researcher at the University of Zurich, said: “This is not just charity. It’s a direct investment in the ecosystem’s stability. LayerZero needs to show it can be a responsible actor.”
