Mantle tokenholders have approved MIP-34, authorizing the Mantle Foundation to negotiate a credit facility of up to 30,000 Ether (worth approximately $68 million) for Aave DAO. The move follows the April rsETH exploit that strained Aave V3 markets, leaving potential bad debt estimated between $123.7 million and $230.1 million.
The credit facility is designed as a treasury backstop to support remediation of that bad debt, though the arrangement is not automatic. It remains contingent on Aave implementing its own recovery plan and both parties finalizing definitive terms after the seven-day Snapshot vote ended Friday.
The exploit involved an attacker depositing 89,567 unbacked rsETH on Aave and borrowing about $190 million in WETH, wstETH, and stablecoins. The incident triggered a collateral failure that spilled into lending-market stress, particularly in Aave’s core Ether-linked markets. Utilization of Aave’s WETH market stayed above 99% for nearly 13 days after the attack, only easing to around 98.47% toward the end of the snapshot period, trapping liquidity and straining withdrawals.
Current data shows utilization at about 91.6%, with roughly 2.02 million WETH supplied and 1.85 million WETH borrowed. While conditions have cooled, normalization is incomplete. The next critical steps are Aave’s recovery plan, final loan terms, and continued liquidity improvement, which will determine whether the backstop becomes a credible confidence bridge or a drawn-out repair process.
