Kelp DAO Incident Could Lead to Hundreds of Millions in Bad Debt for Aave, DefiLlama Founder Outlines Three Potential Resolution Paths

BroadChain has learned that at 09:16 on April 20, according to TechFlow, on April 20, DefiLlama founder 0xngmi published an analysis of the bad debt disposal pressure faced by Aave following the hacker attack on Kelp DAO, proposing three potential solutions. The first solution involves socialized loss sharing, where users would bear an 18.5% impairment, resulting in an estimated bad debt of approximately $216 million. Aave's umbrella insurance could cover $55 million, and the treasury could supplement $85 million, leaving a gap of about $76 million. The second solution involves executing a "rug pull" on rsETH holders on L2, which would generate approximately $341 million in bad debt, with the Arbitrum, Mantle, and Base markets suffering the heaviest losses. The third solution involves returning assets based on pre-attack snapshots, but this is extremely difficult to implement. After insurance coverage, an estimated loss of about $91 million would remain. Another viewpoint suggests confiscating the hacker's collateral, while if the approximately $300 million in AAVE tokens held by the Aave OG security module were slashed at a 20% ratio, it could provide an additional $60 million in loss coverage.