What is the Arbitrum vote about regarding the Kelp DAO exploit?

Arbitrum voters are deciding whether to release 30,765 ETH (about $71 million) that was frozen after the Kelp DAO exploit. The goal is to use these funds to support recovery efforts. This would help compensate affected users and stabilise the ecosystem.

What happened in the Kelp DAO exploit?

The Kelp DAO exploit on April 18 resulted in the loss of around 116,500 rsETH, worth roughly $290 million. This created a major imbalance between issued tokens and actual backing. It is one of the largest DeFi exploits of the year.

Why were the 30,765 ETH funds frozen?

Arbitrum’s Security Council froze the ETH to prevent further damage after the exploit. The funds were moved to a designated address. Releasing them now requires approval through governance voting.

How will the released ETH be used if the proposal passes?

If approved, the ETH will go toward restoring the backing of rsETH and compensating users. The funds will be managed through a multi-signature wallet with multiple trusted signers. This adds a layer of security and oversight.

What is the current voting status on Arbitrum?

So far, 100% of votes cast support the proposal, representing over 34 million ARB tokens. The voting window is still open until next week. Final approval depends on continued support and completion of governance steps.

What is rsETH and why does its backing matter?

rsETH is a restaked ether token that should be backed by underlying ETH. After the exploit, there is a shortfall of about 76,127 rsETH. Restoring backing is critical to maintaining trust and stability in the system.

Who is supporting this recovery proposal?

The proposal is backed by major DeFi players like Aave Labs, LayerZero, EtherFi, and Compound. Their involvement signals strong industry support. It also shows coordination across protocols to manage the fallout.

What are the risks if the proposal is not approved?

If the funds are not released, the rsETH shortfall may persist longer. This could damage user confidence and increase contagion risk across DeFi. It may also delay recovery for affected users.

Arbitrum voters weigh $71M ETH Kelp recovery

Written by Liezl GambePublished May. 2 2026Last Updated May. 2 2026

Arbitrum voters are deciding whether to release 30,765 ETH, worth about $71 million, to support recovery efforts following the Kelp DAO exploit.

The funds were frozen by Arbitrum’s Security Council after the April 18 exploit, which drained around 116,500 restaked ether (rsETH) valued at nearly $290 million.

The proposal, backed by major DeFi players including Aave Labs and LayerZero, aims to use the ETH to help restore rsETH backing and compensate affected users.

If approved, the ETH would be transferred to a recovery wallet controlled by multiple signers, including Certora and EtherFi.

Current voting shows full support from participants so far, with over 34 million ARB tokens backing the proposal ahead of the deadline.

The exploit created a shortfall of about 76,127 rsETH, leaving a significant gap between issued tokens and underlying collateral.

The initiative forms part of a broader industry effort, with multiple protocols pledging additional ETH to limit contagion and stabilise the decentralised finance ecosystem.

At the time of reporting, Arbitrum price was $0.1241.