Aave Brings AAVE to Solana as Industry Rallies Around $292M KelpDAO rsETH Rescue
AAVE, the governance token of the Aave lending protocol, is now live on Solana, giving Solana users access to one of DeFi's largest money markets without leaving the network.
The launch follows the Solana Foundation's disclosure, less than two days earlier, that it would allocate part of its treasury to Aave. The foundation is lending USDT to the protocol as the market works to contain fallout from the KelpDAO rsETH exploit, which drained about $292 million and shook confidence in decentralized lending.
On April 25, Solana Foundation chair Lily Liu said the USDT loan is intended to support recovery efforts after the exploit left major DeFi venues exposed to unbacked collateral and liquidity stress. The move is a rare cross-chain intervention for Solana, whose DeFi ecosystem has largely centered on native lending, trading and liquid-staking applications. It also places Solana in a recovery effort anchored by Aave, a protocol more closely tied to Ethereum and its layer-2 networks.
Liu framed the decision as support for the broader open-finance market, arguing that blockchain economies are interconnected and that Solana's long-term health depends on a functioning DeFi sector beyond its own ecosystem.
The exploit began on April 18 with KelpDAO's rsETH, a liquid restaking token. Attackers allegedly exploited a weakness linked to its LayerZero bridge configuration, then redeemed 116,500 unbacked rsETH on Ethereum. Those assets were deposited as collateral across Aave, Compound and Euler, enabling roughly $292 million in borrowing in ETH and other assets.
The resulting stress hit Aave particularly hard. Users rushed to exit, and WETH utilization reportedly reached 100% within hours. Galaxy Research said that at full utilization, Aave's pool design leaves no idle liquidity for withdrawals: early withdrawers are paid out first, while the rest must wait for new deposits or borrower repayments.
Oak Research said the broader flight drove a 17% drop in DeFi total value locked, with Aave seeing more than $12 billion in outflows. The firm said the episode highlighted how a bridge misconfiguration can cascade into a systemically important lending market, leaving lenders unable to exit depleted pools even when protocols operate as designed.
Aave and KelpDAO have helped organize 'DeFi United', a recovery vehicle intended to rebuild rsETH reserves and make affected users whole. DeFi United's website lists nearly $240 million in commitments from participants including Aave DAO, Arbitrum DAO, Mantle, Ether.fi, Lido, Kelp, Golem Foundation and individual contributors.
Oak Research argued the scale and speed of the response reflects Aave's systemic importance: incentives to protect the protocol's reputation and avoid a precedent where lenders absorb losses tied to collateral accepted by the market are stronger when the largest lending venue is at risk.
That context also makes Solana's support notable. By backing the sector-wide rescue effort and listing AAVE on Solana, the foundation is both helping stabilize confidence in DeFi's biggest lending market and opening a new channel for cross-chain liquidity and distribution as lending protocols reassess collateral standards, bridge dependencies and emergency backstops.
Governance questions remain. Aave tokenholders face trade-offs between deploying treasury resources and the reputational costs of letting users take losses. Even if DeFi United covers the immediate shortfall, the KelpDAO incident has reinforced that collateral quality, bridge architecture and protocol risk controls are tightly linked.
