LayerZero Donated 23M$ to AAVE

LayerZero's Contribution to DeFi United and AAVE

LayerZero has finally decided to join the DeFi United initiative, established to heal the wounds of the $292 million Kelp DAO hack. In the announcement made on Tuesday, the crypto infrastructure provider is donating 5,000 ETH and investing an additional 5,000 ETH to strengthen AAVE detailed analysis liquidity. With this step, LayerZero is providing a total of $23 million in support based on the ETH price of approximately $2,300 at the time of publication. The protocol will also take further measures to increase the liquidity of Aave's native stablecoin GHO, as stated in its X post. Thus, it has concretized the industry-wide recovery plan it announced five days ago.

Kelp DAO Hack and AAVE's Recovery Process

The hack occurred on April 18 with a complex RPC poisoning attack on LayerZero Labs' Decentralized Verifier Network; attackers forged cross-chain messages to release 107,000 unsupported rsETH from the Kelp bridge on Ethereum. These rsETHs were transferred to borrowing positions on Aave, creating serious bad debt in the protocol. The DeFi United initiative, led by Aave, gathered more than $300 million in ETH and stablecoins from various actors; a detailed technical recovery plan was also made public. Accusations against LayerZero are mounting as KelpDAO had used only LayerZero Labs as the single verifier; LayerZero had recommended multi-DVN redundancy, while Kelp claims it preferred default settings. Arbitrum DAO is in the voting process for a 30,765 ETH contribution, Consensys and Joseph Lubin have allocated 30,000 ETH, and protocols like Kelp DAO, Aave DAO, Stani Kulechov, Mantle, Circle, Puffer, and Lido continue their support.

AAVE Technical Outlook and Market Impacts

LayerZero's considerable contribution elevates it to one of the largest supporters. While the Kelp DAO hack deeply shook DeFi, the sector's total locked value dropped from $95 billion to $80 billion. Aave's Ethereum mainnet TVL fell from over $32 billion to $20.3 billion. Current AAVE price 98.16$, 24h change +0.79%, RSI 50.00 (neutral), overall trend downward. Supports:

• S1: 94.03$ (Strong, -4.21% distance)
• S2: 86.34$ (Strong, -12.04% distance)

Resistances:

• R1: 101.91$ (Strong, +3.82% distance)
• R2: 115.41$ (Strong, +17.57% distance)

This development indicates that protocols need to review their security and liquidity measures for AAVE futures. Follow for AAVE spot analysis.