The Arbitrum DAO has begun voting on a proposal to release 30,766 ETH tied to the Kelp DAO exploit. Early results show strong support. The funds are valued at about $71 million and were frozen after the incident.
Within the first hour, about 16.9 million ARB tokens backed the plan. No votes were cast against it during that period. The Snapshot temperature check will continue until May 7, 2026.
If approved, the proposal will move to an on-chain vote on Tally. It will be submitted as a constitutional Arbitrum improvement proposal. A final decision will depend on that stage.
Also Read: Arbitrum Freezes $71M ETH After Kelp DAO Bridge Hack
Arbitrum Plan to Unfreeze 30,765 ETH
The plan was co-authored by Aave Labs, Kelp DAO, LayerZero, EtherFi, and Compound. It focuses on unfreezing 30,765 ETH held by Arbitrum’s Security Council. The funds were secured on April 21.
Arbitrum transferred the ETH into the target address after freezing it. The council also indicated that governance permission was needed before release, and the process will take place via the DAO.
Kelp DAO’s attack occurred on April 18. It siphoned away nearly 116,500 rsETH. Its worth at the time was approximately between $290 million and $293 million.
This event led to a significant backing discrepancy in rsETH. There was a release of rsETH from the Ethereum protocol without the corresponding burn, creating an imbalance in the supply of rsETH.
There are 40,373 rsETH in the adapter contract. The total backing of rsETH is 152,577 rsETH. Therefore, there is a shortfall of approximately 76,127 rsETH worth $174.5 million.
Recovery Plan Targets Locked ETH Release
The purpose of the proposal is to alleviate some of this shortage. The proposal regards the locked-up ETH as a crucial component of the recovery process. The intention is to help affected users and improve asset backing.
In case the proposal is adopted, the ETH will be transferred to the recovery address “0xf22.” The wallet will have a 3-of-4 Gnosis Safe configuration. The signers will comprise Aave Labs, Kelp DAO, Certora, and EtherFi.
This proposal is also a measure to gauge the sentiments of the delegates. It forms part of a multi-stage governance strategy. An on-chain vote will come after this if there is continued support.
This proposal falls within the framework of the larger “DeFi United” campaign. Different protocols have made a pledge of 43,000 ETH for recovery. This combined effort aims to limit wider impact across DeFi.
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