Authors: Aave Labs, KelpDAO, LayerZero, EtherFi, Compound Proposal Type: Constitutional AIP Date: April 25, 2026
Abstract Aave service providers are working with the KelpDAO team, LayerZero team, EtherFi, Compound, and other ecosystem parties on a recovery effort, with the goal of making affected rsETH holders whole. This proposal asks Arbitrum Governance to approve the release of the 30,765.67 ETH immobilized by the Arbitrum Security Council into that coordinated remediation effort. Those funds are intended to be applied toward making affected rsETH holders whole, with the goal of restoring rsETH’s backing.
This is proposed as a one-time measure given that the funds are already immobilized, the release destination is the sole remaining governance question, and releasing them to the ongoing coordinated recovery effort could make a significant positive impact.
Motivation On April 21, 2026, the Arbitrum Security Council froze 30,765.667501709008927568 ETH held by the exploiter on Arbitrum One and moved the funds to 0x0000000000000000000000000000000000000DA0. It was also stated publicly that a subsequent governance action is required to release those funds. Aave service providers are working with the KelpDAO team, LayerZero team, Compound team and other ecosystem parties on a recovery effort for rsETH holders. This proposal is intended to route already-secured funds into that coordinated recovery process.
This exploit has led to a deficit in rsETH’s backing. LlamaRisk’s April 20 incident report states that the KelpDAO rsETH Unichain-to-Ethereum route released 116,500 rsETH on Ethereum without a corresponding source-side burn, breaking the bridge invariant that Ethereum-side locked rsETH should cover remote-chain minted supply. At the time of the report, only 40,373 rsETH remained in the adapter as confirmed backing for 152,577 rsETH of remote-chain claims. The resulting backing shortfall is approximately 76,127 rsETH. The 30,765.67 ETH on Arbitrum represents a material contribution toward restoring that backing.
Across Aave’s Ethereum Core and Arbitrum markets, the exploiter supplied 89,567 rsETH to Aave and borrowed 82,650 WETH plus 821 wstETH against those positions. Note: Aave’s smart contracts were not compromised and the incident originated outside the protocol. Returning the frozen ETH to the recovery effort would directly reduce the outstanding impairment to rsETH’s backing, which in turn would reduce the impairment on the Aave V3 Arbitrum market and its users.
Increasing rsETH’s backing helps restore normal conditions for Arbitrum users, along with users across DeFi more broadly.
Rationale Arbitrum has publicly stated that a governance action is required to release the immobilized funds. The Arbitrum community and its users are directly affected by the rsETH incident, as are users across the broader DeFi ecosystem.
In line with this, our proposal asks Arbitrum DAO to release the recovered ETH into an ongoing, coordinated recovery effort involving the parties listed above and many others with the goal restoring the economic backing of rsETH.
Releasing the immobilized funds into this coordinated recovery effort is the best way to support affected users and provides a clear destination for the funds.
Key Terms Frozen ETH: The 30,765.667501709008927568 ETH frozen by the Arbitrum Security Council on April 21, 2026 and moved to 0x0000000000000000000000000000000000000DA0.
Designated recovery address: A 3-of-4 Gnosis Safe (SAFE) with signers from Aave Labs, KelpDAO, and Certora, and EtherFi, designated for the rsETH incident recovery effort and used solely to receive and apply recovered ETH toward that effort.
Recovery address: 0xf228130ce4fAB082C7D5522c90833cec83A9C15e
Recovered amount: The amount of ETH that Arbitrum governance authorizes for release under this proposal.
Final release amount: 30,765.67 ETH
Specifications This Constitutional AIP proposes the release of 30,765.67 ETH, the full frozen balance currently held at 0x0000000000000000000000000000000000000DA0, to 0xf228130ce4fAB082C7D5522c90833cec83A9C15e.
The recipient address will be a 3-of-4 Gnosis Safe with signers from Aave, KelpDAO, EtherFi, and Certora.
The released ETH is intended to be used solely for the remediation of losses arising from the exploit. If the coordinated recovery effort does not proceed as planned, the parties will return to Arbitrum Governance for further direction on the preferred use of funds.
Before onchain submission, authors of this proposal will update it with the final recipient address, the final ETH amount requested for release, and a short reconciliation appendix showing how the requested amount maps to the Arbitrum-side frozen balance and the intended remediation path.
Use of Funds The ETH is intended to be applied in a neutral and non-discriminatory manner toward restoring rsETH’s backing within the Kelp protocol. Every unit of ETH returned to the recovery effort narrows the backing shortfall and moves rsETH closer to full collateralization.
A full recovery would restore rsETH’s backing entirely, normalizing conditions for all rsETH holders, liquidity providers, and borrowers across Arbitrum and the rest of DeFi. A partial recovery would still meaningfully reduce the shortfall, improving the position of affected users proportionally and increasing the likelihood that the remaining gap can be closed through other contributions to the coordinated effort.
In either case, the outcome for Arbitrum users is better than leaving the funds frozen. The exploit created impairment for users on Arbitrum and across DeFi and every ETH returned to the recovery effort reduces that impairment directly.
Steps to Implement First, Aave Labs has published this Constitutional AIP on the Arbitrum forum for discussion and feedback.
Second, a Snapshot temperature check may be conducted to gauge delegate sentiment before moving onchain.
Third, if the proposal proceeds, it will be submitted onchain via Tally as a Constitutional AIP, targeting the Arbitrum Core governor, with the final executable action and recipient parameters.
Fourth, if the onchain vote passes, the proposal will proceed through Arbitrum’s Constitutional AIP lifecycle, including the applicable waiting periods, message finalization, and final execution.
Timeline Forum publication: immediate
Forum discussion: 1 week
Temperature check: 1 week
Onchain submission: after forum discussion and any temperature check, through the Arbitrum Core governor. Constitutional proposals are submitted through Arbitrum Core.
Voting delay: 3 days after onchain submission before voting begins.
Onchain vote: 14 days, extendable to 16 days if quorum is reached in the final 2 days.
L2 waiting period: 8 days for a Constitutional AIP.
L2-to-L1 message finalization: typically at least 1 week.
L1 waiting period: 3 days.
Execution: after completion of the Constitutional AIP lifecycle and any additional implementation steps.
Total estimated period: approximately 49 days
Overall Cost No new treasury allocation is requested.
This proposal concerns the release of ETH already frozen on Arbitrum One in connection with the exploit. The direct budgetary cost to Arbitrum DAO is therefore expected to be zero outside of normal governance execution overhead.
Requested Feedback Aave Labs requests feedback on whether Arbitrum Governance supports release of the frozen ETH into the coordinated rsETH recovery effort.
Conflict of Interest Disclosure Authors are submitting this proposal because they are affected by this incident, and because the requested release would benefit the ongoing coordinated recovery effort, releasing frozen proceeds to restore rsETH’s backing.
Indemnification As a condition of the requested release, Aave Labs, together with its affiliates, subsidiaries and successors-in-interest (collectively, “Aave Labs”), jointly and severally agree to unconditionally indemnify, defend, and hold harmless The Arbitrum Foundation, Offchain Labs, Inc., the Arbitrum Security Council and each member thereof and each of their officers, directors, agents, employees, advisors, contractors, representatives, and successors (each, an “Indemnified Party”) from and against any and all claims (including any claims brought by tokenholders, DAO participants, counterparties, or governmental authorities from any jurisdiction), regulatory inquiries, actions, demands, proceedings, losses, damages, fees, lost profit, tax, reduction in value, liabilities, costs, and expenses (including reasonable fees and expenses of lawyers, accountants, auditors, experts and other professionals), known and unknown claims, whether in contract, tort, criminal (to the fullest extent permitted by applicable law), or otherwise, directly or indirectly arising out of, arising from, resulting from or in connection with (1) the Arbitrum Security Council’s action to freeze the 30,766 ETH being held in the address on Arbitrum One that was connected to the KelpDAO exploit at the time of such action and its movement to a new address (“Frozen ETH”), (2) the release and movement of the Frozen ETH to the designated recovery address pursuant to this proposal (the “Delivery”), and (3) any and all actions of an Indemnified Party in furtherance of the actions described in clauses (1) and (2), in each case including enforcement actions, penalties, and reasonable defense costs related thereto (such amounts, collectively, “Indemnifiable Expenses”).
Promptly following the passage of this proposal, if applicable, and prior to initiating the Delivery, Aave Labs shall promptly enter into a customary Indemnification Agreement with each of the Arbitrum Foundation, Offchain Labs, Inc., and each member of the Arbitrum Security Council, which shall memorialize the terms set forth herein and shall further provide: (1) for advancement of all Indemnifiable Expenses within five business days of upon written request, (2) for contribution in the event that indemnification is unavailable to an Indemnified Party for any reason whatsoever, (3) that Aave Labs is the indemnitor of first resort (i.e., its obligations to the Indemnified Party are primary and any obligation of a third party to advance expenses or to provide indemnification for the Indemnifiable Expenses are secondary), (4) that each Indemnified Party shall have the right in its sole discretion to conduct the defense of and to settle or resolve any such claim, which shall be included as Indemnifiable Expenses; however, (i) Aave Labs shall have the right to initial notice from and reasonable consultation with the Indemnified Party on the status of any such claim, and (ii) Aave Labs shall have the right to advance notice of, and consent to, any resolution of such claim, which consent shall not be unreasonably withheld, (5) that this indemnification shall survive indefinitely and shall not be limited by the completion of the actions contemplated herein, the termination of this proposal, or the resignation or removal of any Indemnified Party, (6) that the indemnification obligations shall not be subject to any cap, basket, deductible, or limitation (either individually or in the aggregate with respect to the Indemnified Parties), (7) that indemnification shall apply to the fullest extent permitted by law, including claims alleging negligence, gross negligence, or breach of fiduciary duty (but excluding willful misconduct or fraud), (8) all amounts payable by Aave Labs under or in connection with the Indemnification Agreement shall be paid in full without any set-off or counterclaim and free and clear of any deductions or withholdings for any and all present or future taxes, levies, imposts, duties, charges, fees, deductions, or withholdings of any nature imposed by any governmental authority to the maximum extent allowed by applicable law; provided, however that such payments shall include any “gross up” that may be necessary to ensure that the Indemnified Party is economically whole on an after tax basis, (9) the rights of the Indemnified Parties pursuant to the Indemnification Agreement shall apply irrespective of, and shall not be reduced by, any insurance maintained by an Indemnified Party or any third party indemnitor, and (10) that the Indemnification Agreements contemplated herein shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflict of laws principles, and in the case of any dispute resolution relating to this Agreement, Aave Labs hereby submits to the exclusive jurisdiction of the state and federal courts located in New York County, New York for such dispute resolution process, (11) solely with respect to The Arbitrum Foundation’s Indemnification Agreement, that Aave Labs shall reimburse the Arbitrum Foundation for any Indemnifiable Expenses incurred as a result of payment from The Arbitrum Captive Insurance Product (as further detailed at https://docs.arbitrum.foundation/assets/files/ArbitrumFoundationCaptiveInsuranceProduct-c149a557e210f00d0c457b10b367f58c.pdf) to ArbitrumDAO delegates as if such ArbitrumDAO delegate was an Indemnified Party and (12) the Indemnified Parties shall represent and warrant in their appliable Indemnification Agreement that, to their actual knowledge, they have not paid or become obligated to pay any cash amounts constituting Indemnifiable Expenses prior to the date of the first publication of this proposal that they intend to seek indemnification for pursuant to their Indemnification Agreement.
Authors: Aave Labs, KelpDAO, LayerZero, EtherFi, Compound Proposal Type: Constitutional AIP Date: April 25, 2026
Abstract Aave service providers are working with the KelpDAO team, LayerZero team, EtherFi, Compound, and other ecosystem parties on a recovery effort, with the goal of making affected rsETH holders whole. This proposal asks Arbitrum Governance to approve the release of the 30,765.67 ETH immobilized by the Arbitrum Security Council into that coordinated remediation effort. Those funds are intended to be applied toward making affected rsETH holders whole, with the goal of restoring rsETH’s backing.
This is proposed as a one-time measure given that the funds are already immobilized, the release destination is the sole remaining governance question, and releasing them to the ongoing coordinated recovery effort could make a significant positive impact.
Motivation On April 21, 2026, the Arbitrum Security Council froze 30,765.667501709008927568 ETH held by the exploiter on Arbitrum One and moved the funds to 0x0000000000000000000000000000000000000DA0. It was also stated publicly that a subsequent governance action is required to release those funds. Aave service providers are working with the KelpDAO team, LayerZero team, Compound team and other ecosystem parties on a recovery effort for rsETH holders. This proposal is intended to route already-secured funds into that coordinated recovery process.
This exploit has led to a deficit in rsETH’s backing. LlamaRisk’s April 20 incident report states that the KelpDAO rsETH Unichain-to-Ethereum route released 116,500 rsETH on Ethereum without a corresponding source-side burn, breaking the bridge invariant that Ethereum-side locked rsETH should cover remote-chain minted supply. At the time of the report, only 40,373 rsETH remained in the adapter as confirmed backing for 152,577 rsETH of remote-chain claims. The resulting backing shortfall is approximately 76,127 rsETH. The 30,765.67 ETH on Arbitrum represents a material contribution toward restoring that backing.
Across Aave’s Ethereum Core and Arbitrum markets, the exploiter supplied 89,567 rsETH to Aave and borrowed 82,650 WETH plus 821 wstETH against those positions. Note: Aave’s smart contracts were not compromised and the incident originated outside the protocol. Returning the frozen ETH to the recovery effort would directly reduce the outstanding impairment to rsETH’s backing, which in turn would reduce the impairment on the Aave V3 Arbitrum market and its users.
Increasing rsETH’s backing helps restore normal conditions for Arbitrum users, along with users across DeFi more broadly.
Rationale Arbitrum has publicly stated that a governance action is required to release the immobilized funds. The Arbitrum community and its users are directly affected by the rsETH incident, as are users across the broader DeFi ecosystem.
In line with this, our proposal asks Arbitrum DAO to release the recovered ETH into an ongoing, coordinated recovery effort involving the parties listed above and many others with the goal restoring the economic backing of rsETH.
Releasing the immobilized funds into this coordinated recovery effort is the best way to support affected users and provides a clear destination for the funds.
Key Terms Frozen ETH: The 30,765.667501709008927568 ETH frozen by the Arbitrum Security Council on April 21, 2026 and moved to 0x0000000000000000000000000000000000000DA0.
Designated recovery address: A 3-of-4 Gnosis Safe (SAFE) with signers from Aave Labs, KelpDAO, and Certora, and EtherFi, designated for the rsETH incident recovery effort and used solely to receive and apply recovered ETH toward that effort.
Recovery address: 0xf228130ce4fAB082C7D5522c90833cec83A9C15e
Recovered amount: The amount of ETH that Arbitrum governance authorizes for release under this proposal.
Final release amount: 30,765.67 ETH
Specifications This Constitutional AIP proposes the release of 30,765.67 ETH, the full frozen balance currently held at 0x0000000000000000000000000000000000000DA0, to 0xf228130ce4fAB082C7D5522c90833cec83A9C15e.
The recipient address will be a 3-of-4 Gnosis Safe with signers from Aave, KelpDAO, EtherFi, and Certora.
The released ETH is intended to be used solely for the remediation of losses arising from the exploit. If the coordinated recovery effort does not proceed as planned, the parties will return to Arbitrum Governance for further direction on the preferred use of funds.
Before onchain submission, authors of this proposal will update it with the final recipient address, the final ETH amount requested for release, and a short reconciliation appendix showing how the requested amount maps to the Arbitrum-side frozen balance and the intended remediation path.
Use of Funds The ETH is intended to be applied in a neutral and non-discriminatory manner toward restoring rsETH’s backing within the Kelp protocol. Every unit of ETH returned to the recovery effort narrows the backing shortfall and moves rsETH closer to full collateralization.
A full recovery would restore rsETH’s backing entirely, normalizing conditions for all rsETH holders, liquidity providers, and borrowers across Arbitrum and the rest of DeFi. A partial recovery would still meaningfully reduce the shortfall, improving the position of affected users proportionally and increasing the likelihood that the remaining gap can be closed through other contributions to the coordinated effort.
In either case, the outcome for Arbitrum users is better than leaving the funds frozen. The exploit created impairment for users on Arbitrum and across DeFi and every ETH returned to the recovery effort reduces that impairment directly.
Steps to Implement First, Aave Labs has published this Constitutional AIP on the Arbitrum forum for discussion and feedback.
Second, a Snapshot temperature check may be conducted to gauge delegate sentiment before moving onchain.
Third, if the proposal proceeds, it will be submitted onchain via Tally as a Constitutional AIP, targeting the Arbitrum Core governor, with the final executable action and recipient parameters.
Fourth, if the onchain vote passes, the proposal will proceed through Arbitrum’s Constitutional AIP lifecycle, including the applicable waiting periods, message finalization, and final execution.
Timeline Forum publication: immediate
Forum discussion: 1 week
Temperature check: 1 week
Onchain submission: after forum discussion and any temperature check, through the Arbitrum Core governor. Constitutional proposals are submitted through Arbitrum Core.
Voting delay: 3 days after onchain submission before voting begins.
Onchain vote: 14 days, extendable to 16 days if quorum is reached in the final 2 days.
L2 waiting period: 8 days for a Constitutional AIP.
L2-to-L1 message finalization: typically at least 1 week.
L1 waiting period: 3 days.
Execution: after completion of the Constitutional AIP lifecycle and any additional implementation steps.
Total estimated period: approximately 49 days
Overall Cost No new treasury allocation is requested.
This proposal concerns the release of ETH already frozen on Arbitrum One in connection with the exploit. The direct budgetary cost to Arbitrum DAO is therefore expected to be zero outside of normal governance execution overhead.
Requested Feedback Aave Labs requests feedback on whether Arbitrum Governance supports release of the frozen ETH into the coordinated rsETH recovery effort.
Conflict of Interest Disclosure Authors are submitting this proposal because they are affected by this incident, and because the requested release would benefit the ongoing coordinated recovery effort, releasing frozen proceeds to restore rsETH’s backing.
Indemnification As a condition of the requested release, Aave Labs, together with its affiliates, subsidiaries and successors-in-interest (collectively, “Aave Labs”), jointly and severally agree to unconditionally indemnify, defend, and hold harmless The Arbitrum Foundation, Offchain Labs, Inc., the Arbitrum Security Council and each member thereof and each of their officers, directors, agents, employees, advisors, contractors, representatives, and successors (each, an “Indemnified Party”) from and against any and all claims (including any claims brought by tokenholders, DAO participants, counterparties, or governmental authorities from any jurisdiction), regulatory inquiries, actions, demands, proceedings, losses, damages, fees, lost profit, tax, reduction in value, liabilities, costs, and expenses (including reasonable fees and expenses of lawyers, accountants, auditors, experts and other professionals), known and unknown claims, whether in contract, tort, criminal (to the fullest extent permitted by applicable law), or otherwise, directly or indirectly arising out of, arising from, resulting from or in connection with (1) the Arbitrum Security Council’s action to freeze the 30,766 ETH being held in the address on Arbitrum One that was connected to the KelpDAO exploit at the time of such action and its movement to a new address (“Frozen ETH”), (2) the release and movement of the Frozen ETH to the designated recovery address pursuant to this proposal (the “Delivery”), and (3) any and all actions of an Indemnified Party in furtherance of the actions described in clauses (1) and (2), in each case including enforcement actions, penalties, and reasonable defense costs related thereto (such amounts, collectively, “Indemnifiable Expenses”).
Promptly following the passage of this proposal, if applicable, and prior to initiating the Delivery, Aave Labs shall promptly enter into a customary Indemnification Agreement with each of the Arbitrum Foundation, Offchain Labs, Inc., and each member of the Arbitrum Security Council, which shall memorialize the terms set forth herein and shall further provide: (1) for advancement of all Indemnifiable Expenses within five business days of upon written request, (2) for contribution in the event that indemnification is unavailable to an Indemnified Party for any reason whatsoever, (3) that Aave Labs is the indemnitor of first resort (i.e., its obligations to the Indemnified Party are primary and any obligation of a third party to advance expenses or to provide indemnification for the Indemnifiable Expenses are secondary), (4) that each Indemnified Party shall have the right in its sole discretion to conduct the defense of and to settle or resolve any such claim, which shall be included as Indemnifiable Expenses; however, (i) Aave Labs shall have the right to initial notice from and reasonable consultation with the Indemnified Party on the status of any such claim, and (ii) Aave Labs shall have the right to advance notice of, and consent to, any resolution of such claim, which consent shall not be unreasonably withheld, (5) that this indemnification shall survive indefinitely and shall not be limited by the completion of the actions contemplated herein, the termination of this proposal, or the resignation or removal of any Indemnified Party, (6) that the indemnification obligations shall not be subject to any cap, basket, deductible, or limitation (either individually or in the aggregate with respect to the Indemnified Parties), (7) that indemnification shall apply to the fullest extent permitted by law, including claims alleging negligence, gross negligence, or breach of fiduciary duty (but excluding willful misconduct or fraud), (8) all amounts payable by Aave Labs under or in connection with the Indemnification Agreement shall be paid in full without any set-off or counterclaim and free and clear of any deductions or withholdings for any and all present or future taxes, levies, imposts, duties, charges, fees, deductions, or withholdings of any nature imposed by any governmental authority to the maximum extent allowed by applicable law; provided, however that such payments shall include any “gross up” that may be necessary to ensure that the Indemnified Party is economically whole on an after tax basis, (9) the rights of the Indemnified Parties pursuant to the Indemnification Agreement shall apply irrespective of, and shall not be reduced by, any insurance maintained by an Indemnified Party or any third party indemnitor, and (10) that the Indemnification Agreements contemplated herein shall be governed by and construed in accordance with the laws of the State of New York, without regard to conflict of laws principles, and in the case of any dispute resolution relating to this Agreement, Aave Labs hereby submits to the exclusive jurisdiction of the state and federal courts located in New York County, New York for such dispute resolution process, (11) solely with respect to The Arbitrum Foundation’s Indemnification Agreement, that Aave Labs shall reimburse the Arbitrum Foundation for any Indemnifiable Expenses incurred as a result of payment from The Arbitrum Captive Insurance Product (as further detailed at https://docs.arbitrum.foundation/assets/files/ArbitrumFoundationCaptiveInsuranceProduct-c149a557e210f00d0c457b10b367f58c.pdf) to ArbitrumDAO delegates as if such ArbitrumDAO delegate was an Indemnified Party and (12) the Indemnified Parties shall represent and warrant in their appliable Indemnification Agreement that, to their actual knowledge, they have not paid or become obligated to pay any cash amounts constituting Indemnifiable Expenses prior to the date of the first publication of this proposal that they intend to seek indemnification for pursuant to their Indemnification Agreement.
We are deeply in favor of utilizing the funds to reback rsETH on Aave. We wanted to comment that we are also in alignment with equally distributing the funds, and we are happy to see other delegates agree. Our reasoning is that the funds did not come from Arbitrum’s treasury, so Arbitrum does not necessarily have an extra claim to unique reimbursement. This shouldn’t be an issue anyways because it seems Defi United has raised enough funds, ideally avoiding the haircut altogether. Lastly we are in favor of speeding up the process in any way possible. We thought @daniel ‘s idea #1 of getting someone to loan the 30765 ETH was great. If it’s impossible to find someone to loan that much out individually, perhaps Defi United can add an option to loan eth—and then the frozen rsEth can be used to pay them back once the proposal passes.
We are deeply in favor of utilizing the funds to reback rsETH on Aave. We wanted to comment that we are also in alignment with equally distributing the funds, and we are happy to see other delegates agree. Our reasoning is that the funds did not come from Arbitrum’s treasury, so Arbitrum does not necessarily have an extra claim to unique reimbursement. This shouldn’t be an issue anyways because it seems Defi United has raised enough funds, ideally avoiding the haircut altogether. Lastly we are in favor of speeding up the process in any way possible. We thought @daniel ‘s idea #1 of getting someone to loan the 30765 ETH was great. If it’s impossible to find someone to loan that much out individually, perhaps Defi United can add an option to loan eth—and then the frozen rsEth can be used to pay them back once the proposal passes.
https://forum.arbitrum.foundation/t/constitutional-aip-approve-release-of-frozen-eth/30825/26?u=maxlomu
https://forum.arbitrum.foundation/t/constitutional-aip-approve-release-of-frozen-eth/30825/24
https://forum.arbitrum.foundation/t/constitutional-aip-approve-release-of-frozen-eth/30825/14?u=griff
We are deeply in favor of utilizing the funds to reback rsETH on Aave. We wanted to comment that we are also in alignment with equally distributing the funds, and we are happy to see other delegates agree. Our reasoning is that the funds did not come from Arbitrum’s treasury, so Arbitrum does not necessarily have an extra claim to unique reimbursement. This shouldn’t be an issue anyways because it seems Defi United has raised enough funds, ideally avoiding the haircut altogether. Lastly we are in favor of speeding up the process in any way possible. We thought @daniel ‘s idea #1 of getting someone to loan the 30765 ETH was great. If it’s impossible to find someone to loan that much out individually, perhaps Defi United can add an option to loan eth—and then the frozen rsEth can be used to pay them back once the proposal passes.
We are deeply in favor of utilizing the funds to reback rsETH on Aave. We wanted to comment that we are also in alignment with equally distributing the funds, and we are happy to see other delegates agree. Our reasoning is that the funds did not come from Arbitrum’s treasury, so Arbitrum does not necessarily have an extra claim to unique reimbursement. This shouldn’t be an issue anyways because it seems Defi United has raised enough funds, ideally avoiding the haircut altogether. Lastly we are in favor of speeding up the process in any way possible. We thought @daniel ‘s idea #1 of getting someone to loan the 30765 ETH was great. If it’s impossible to find someone to loan that much out individually, perhaps Defi United can add an option to loan eth—and then the frozen rsEth can be used to pay them back once the proposal passes.
https://forum.arbitrum.foundation/t/constitutional-aip-approve-release-of-frozen-eth/30825/26?u=maxlomu
https://forum.arbitrum.foundation/t/constitutional-aip-approve-release-of-frozen-eth/30825/24
https://forum.arbitrum.foundation/t/constitutional-aip-approve-release-of-frozen-eth/30825/14?u=griff
We are deeply in favor of utilizing the funds to reback rsETH on Aave. We wanted to comment that we are also in alignment with equally distributing the funds, and we are happy to see other delegates agree. Our reasoning is that the funds did not come from Arbitrum's treasury, so Arbitrum does not necessarily have an extra claim to unique reimbursement. This shouldn't be an issue anyways because it seems Defi United has raised enough funds, ideally avoiding the haircut altogether.
Lastly we are in favor of speeding up the process in any way possible. We thought @daniel 's idea #1 of getting someone to loan the 30765 ETH was great. If it's impossible to find someone to loan that much out individually, perhaps Defi United can add an option to loan eth---and then the frozen rsEth can be used to pay them back once the proposal passes.
We are deeply in favor of utilizing the funds to reback rsETH on Aave. We wanted to comment that we are also in alignment with equally distributing the funds, and we are happy to see other delegates agree. Our reasoning is that the funds did not come from Arbitrum's treasury, so Arbitrum does not necessarily have an extra claim to unique reimbursement. This shouldn't be an issue anyways because it seems Defi United has raised enough funds, ideally avoiding the haircut altogether.
Lastly we are in favor of speeding up the process in any way possible. We thought @daniel 's idea #1 of getting someone to loan the 30765 ETH was great. If it's impossible to find someone to loan that much out individually, perhaps Defi United can add an option to loan eth---and then the frozen rsEth can be used to pay them back once the proposal passes.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Manugotsuka, and is based on their combined research, fact-checking, and discussion.
We voted FOR.
This amended proposal is materially different from the original recovery structure, even if the broader recovery objective remains the same.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Manugotsuka, and is based on their combined research, fact-checking, and discussion.
We voted FOR.
This amended proposal is materially different from the original recovery structure, even if the broader recovery objective remains the same.
We recognize that this situation raises difficult questions around governance neutrality, legal coordination, and the relationship between DAOs and traditional legal systems.
At the same time, from our perspective, this does not set a precedent or a concerning case of governance being forced by external legal pressure. The DAO was not compelled by the court to take this course of action. Rather, governance determined that this path was the most reasonable and responsible way to resolve the situation under the current circumstances.
Importantly, this approach allows the Arbitrum DAO to conclude its direct involvement in the matter while transferring responsibility for handling the recovery process appropriately to Aave LLC. It also preserves the recovery objective previously supported during temp-check and provides a clear support to move the situation toward a resolution.
Finally, we believe this was a proper course of action of the DAO. This resolution demonstrates that Arbitrum DAO is capable of acting responsibly in complex situations and takes its governance responsibilities seriously as a participant within the broader crypto ecosystem.
[Constitutional] AIP: Amended Release of Frozen ETH Pursuant to Court Order
Status: Amended following passed Temp Check
Authors: Aave Labs, KelpDAO, LayerZero, EtherFi, Compound
Date: 5/11/26
[Constitutional] AIP: Amended Release of Frozen ETH Pursuant to Court Order
Status: Amended following passed Temp Check
Authors: Aave Labs, KelpDAO, LayerZero, EtherFi, Compound
Date: 5/11/26
This amended Constitutional AIP updates the execution path for the previously posted proposal to release the frozen ETH secured by the Arbitrum Security Council in connection with the rsETH incident. Since then, a Court order was issued authorizing the transfer of the frozen ETH to a wallet controlled by Aave LLC and for Aave LLC to hold this frozen ETH while the court continues to deliberate.
This amendment preserves the intent approved in the Temp Check to transfer the frozen ETH, but it updates the recipient and custody mechanics so that the onchain execution complies with the recent Court order.
If this Constitutional AIP passes, the payload will transfer 30,765.667501709008927568 ETH from 0x0000000000000000000000000000000000000DA0 to the Aave LLC-controlled receiving address listed below.
Aave LLC receiving address:
0x3b87db6ded35eBD28EcbF8014fb325eef23f6C07
Court order: https://storage.courtlistener.com/recap/gov.uscourts.nysd.653423/gov.uscourts.nysd.653423.52.0.pdf
On April 21, 2026, the Arbitrum Security Council executed an emergency action to immobilize ETH connected to the rsETH incident. The ETH was moved to 0x0000000000000000000000000000000000000DA0 pending a subsequent governance action.
Then, on April 25, 2026, Aave Labs and others posted an AIP to approve the release of the 30,765.667501709008927568 ETH that the Arbitrum Security Council froze following the April 18 incident. That AIP proposed to release the recovered ETH into an ongoing, coordinated recovery effort with the goal of restoring the economic backing of rsETH. This original proposal completed the Temp Check process with overwhelming approval and strong delegate support.
The standard Arbitrum governance process uses Snapshot for Temp Checks and Tally for onchain execution, with Constitutional proposals targeting Arbitrum Core. Arbitrum's governance documentation also distinguishes between Constitutional and Non-Constitutional AIPs, and states that Constitutional proposals are submitted through Arbitrum Core on Tally.
After the Temp Check, plaintiffs holding judgments against North Korea served a restraining notice on Arbitrum DAO seeking to restrain the ETH immobilized as part of the recovery effort. Aave LLC filed an emergency motion to vacate the notice, and the Court held a hearing on May 6.
Following additional submissions from the parties, the Court accepted Aave LLC's proposed path. The Court entered an order authorizing an onchain Arbitrum DAO vote to transfer the immobilized ETH to Aave LLC, with the restraining order following the ETH and attaching to Aave LLC upon transfer.
This amended AIP updates the court order's execution path accordingly.
The goal of the original proposal remains unchanged. The frozen ETH is part of the broader recovery effort following the rsETH incident, and Arbitrum Governance has already signaled support for releasing the ETH rather than leaving it immobilized indefinitely.
However, on the evening (New York time) of Friday, May 1, 2026, a law firm representing plaintiff-judgment creditors in a case called Kim v. Democratic People's Republic of Korea, 25-MC-527 (S.D.N.Y.) served a restraining notice on "Arbitrum DAO" that threatened significant delay. Aave Labs acted as promptly as possible. On Monday May 4, 2026, Aave LLC, a US entity of Aave Labs, filed an emergency motion to vacate the restraining order. That motion was heard in oral arguments on May 6, 2026, and the substantive issues remain under consideration by the court. (We are grateful to the judge for her rapid response and thoughtful, ongoing consideration.)
On Friday, May 8, 2026, after an exchange of letters from the plaintiffs and Aave LLC, the court issued an order that the Restraining Notice issued to "Arbitrum DAO" is modified, so as to allow an on-chain vote to transfer the immobilized assets to a digital assets wallet controlled by Aave LLC. The judge specifically ordered that such a transfer process "will not be deemed to be a violation of the Restraining Notice," and that "[a]ny party initiating that on-chain transaction, voting with regard to that on-chain transaction, or participating in the on-chain transfer of assets to Aave LLC shall not be in violation of the Restraining Notice."
In other words, tokenholders are free to vote or otherwise participate in this process, without fear of violating the restraining notice. (Not legal advice; you are, of course, encouraged to consult your own attorney.)
The court reserved decision on all other matters in connection with the Restraining Notice and the Immobilized Assets, meaning that the central question on the merits -- whether and when the funds will be released for use in the recovery effort -- remains to be decided by the court.
After that transfer, and per the court's order, Aave LLC will abide by the terms of the Restraining Notice as if the Restraining Notice had been issued to Aave LLC, until and unless the Restraining Notice is vacated or further modified by the Court, is withdrawn or modified by Plaintiffs, or expires by operation of law. In other words, Aave LLC will not sell, assign, transfer, or interfere with these funds, until the court allows such actions.
We view this order as very helpful for the Arbitrum community. It allows the ETH to be transferred to Aave LLC, so that assuming the court agrees with Aave LLC's position that the funds may be used in the recovery efforts, that process will be logistically easier. Aave is grateful to the Arbitrum community for being a "Good Samaritan," and we are eager to ease any further administration burdens on the Arbitrum community.
This AIP amends the prior proposal titled:
[Constitutional] AIP: Approve Release of Frozen ETH
We note that the court's order forces a modification in the onchain AIP from the snapshot version. The original proposal was that the recipient address would be a 3-of-4 Gnosis Safe with signers from Aave, KelpDAO, EtherFi, and Certora. However, for administrative and legal convenience, and to be consistent with the court's order, the onchain vote will be that the recipient address will be to a wallet controlled by Aave LLC.
Aave will continue to coordinate with the relevant parties, and the goal remains the same. The ETH is intended to be applied in a neutral and non-discriminatory manner toward restoring rsETH's backing within the Kelp protocol. Every unit of ETH returned to the recovery effort narrows the backing shortfall and moves rsETH closer to full collateralization.
Accordingly, the amendment is limited to the recipient and custody mechanics.The original proposal requested release of the frozen ETH into the coordinated rsETH recovery effort. This amended proposal requests transfer of the frozen ETH to Aave LLC pursuant to the court order.
After the transfer, and per the court's order, Aave LLC will abide by the terms of the restraining notice as if the restraining notice had been issued to Aave LLC, until and unless the restraining notice is vacated or further modified by the Court, is withdrawn or modified by Plaintiffs, or expires by operation of law. In other words, Aave LLC will not sell, assign, transfer, or interfere with these funds, until the court allows such actions.
This Constitutional AIP authorizes the transfer of 30,765.667501709008927568 ETH from:
0x0000000000000000000000000000000000000DA0
to the following Aave LLC-controlled receiving address:
0x3b87db6ded35eBD28EcbF8014fb325eef23f6C07
The transfer is made pursuant to the Court order dated May 8, 2026, which authorizes an onchain Arbitrum DAO vote to move the immobilized ETH to Aave LLC and provides that the restraining order will follow the ETH and attach to Aave LLC upon transfer.
Aave LLC will comply with the restraining order while the Court continues to consider the matter.
This AIP does not authorize Aave LLC to distribute, transfer, pledge, encumber, stake, lend, swap, bridge, rehypothecate, or otherwise use the ETH unless permitted by the Court or applicable legal process.
This AIP does not request any new treasury allocation from Arbitrum DAO.
If this AIP passes, the payload will execute a transfer of 30,765.667501709008927568 ETH from 0x0000000000000000000000000000000000000DA0 to 0x3b87db6ded35eBD28EcbF8014fb325eef23f6C07.
The proposal will be submitted as a Constitutional AIP through Arbitrum Core. Arbitrum's proposal submission guide states that Constitutional proposals target Arbitrum Core, while Non-Constitutional proposals target Arbitrum Treasury.
Target source address:
0x0000000000000000000000000000000000000DA0
Recipient:
0x3b87db6ded35eBD28EcbF8014fb325eef23f6C07
Amount:
30,765.667501709008927568 ETH
Action:
Transfer ETH to Aave LLC-controlled receiving address pursuant to Court order.
Additional actions:
None.
Treasury spend:
None.
Legal Posture
The restraining notice previously served on Arbitrum DAO sought to restrain the ETH immobilized as part of the rsETH recovery effort. The Court has now entered an order authorizing an onchain Arbitrum DAO vote to transfer the ETH to Aave LLC, with the restraining order following the ETH and attaching to Aave LLC upon transfer.
Aave LLC will comply with the restraining order while the Court continues to consider the matter.
This means the onchain vote is not asking delegates to disregard the restraining order. It is asking delegates to approve the transfer path authorized by the Court.
The Court order is attached here: https://storage.courtlistener.com/recap/gov.uscourts.nysd.653423/gov.uscourts.nysd.653423.52.0.pdf
In parallel, the broader rsETH incident recovery plan continues.
On May 6, the identified thief positions on Aave V3 were liquidated. The retrieved rsETH collateral was transferred to the Recovery Guardian as specified in the preceding AIP approved by Aave DAO governance. Other users, including Umbrella stakers, were not impacted by this liquidation process.
The next phase of the plan focuses on restoring rsETH backing and returning affected markets to normal operation. On Arbitrum, the liquidated rsETH will be burned. Kelp will retire the corresponding LayerZero packet on Ethereum so that it cannot mint new rsETH on the receiving side. Together, those steps are intended to neutralize the inflated rsETH supply created by the exploit.
On Ethereum, the seized rsETH will be sent to the bridge lockbox. That ETH, together with committed ETH from the broader DeFi United coalition, is expected to restore the backing of the rsETH lockbox contract. Once the lockbox is backed, the bridge can resume normal operation.
Separately, replacement funds are expected to be borrowed as a contingency to reduce the timing impact on affected Aave users while the immobilized ETH remains subject to the Court process.
This section is provided for recovery context only. The onchain action authorized by this AIP is limited to the transfer of the frozen ETH to Aave LLC pursuant to the Court order.
No new treasury allocation is requested.
This proposal concerns ETH already immobilized on Arbitrum One in connection with the rsETH incident. The direct budgetary cost to Arbitrum DAO is expected to be zero outside of normal governance execution overhead.
This amendment is submitted to address the main risk of legal execution risk by aligning the transfer with the Court's order and by having the restraining order follow the ETH to Aave LLC upon transfer.
The proposal does not ask delegates to determine final ownership of the ETH. The Court process remains ongoing.
The proposal does not authorize immediate distribution to affected users. Aave LLC will comply with the restraining order while the Court continues to consider the matter.
The proposal does not create new Arbitrum DAO treasury exposure. It only authorizes transfer of ETH already immobilized as part of the Security Council emergency action.
The proposal changes the recipient from the originally contemplated recovery structure to Aave LLC. Because that is a material execution-path change after the Temp Check, the original coauthors have been asked to support this amendment before onchain submission.
First, the final payload will be prepared and submitted onchain.
Second, the Constitutional AIP will proceed to onchain vote through Arbitrum Core.
Third, if the AIP passes and execution occurs, the immobilized ETH will be transferred to the Aave LLC-controlled receiving address, with the restraining order following the ETH and attaching to Aave LLC upon transfer.
Arbitrum delegates are asked to vote FOR this amended Constitutional AIP.
A FOR vote approves the court-authorized transfer of 30,765.667501709008927568 ETH from 0x0000000000000000000000000000000000000DA0 to the Aave LLC-controlled receiving address listed in this proposal.
A FOR vote does not authorize distribution or use of the ETH while the restraining order remains in effect.
A FOR vote preserves the recovery objective supported by the Temp Check while updating the execution path to reflect the Court's order.
An AGAINST vote leaves the ETH immobilized at the current address unless and until another governance or legal path is approved.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Manugotsuka, and is based on their combined research, fact-checking, and discussion.
We voted FOR.
This amended proposal is materially different from the original recovery structure, even if the broader recovery objective remains the same.
The following reflects the views of L2BEAT’s governance team, composed of @krst and @Manugotsuka, and is based on their combined research, fact-checking, and discussion.
We voted FOR.
This amended proposal is materially different from the original recovery structure, even if the broader recovery objective remains the same.
We recognize that this situation raises difficult questions around governance neutrality, legal coordination, and the relationship between DAOs and traditional legal systems.
At the same time, from our perspective, this does not set a precedent or a concerning case of governance being forced by external legal pressure. The DAO was not compelled by the court to take this course of action. Rather, governance determined that this path was the most reasonable and responsible way to resolve the situation under the current circumstances.
Importantly, this approach allows the Arbitrum DAO to conclude its direct involvement in the matter while transferring responsibility for handling the recovery process appropriately to Aave LLC. It also preserves the recovery objective previously supported during temp-check and provides a clear support to move the situation toward a resolution.
Finally, we believe this was a proper course of action of the DAO. This resolution demonstrates that Arbitrum DAO is capable of acting responsibly in complex situations and takes its governance responsibilities seriously as a participant within the broader crypto ecosystem.
[Constitutional] AIP: Amended Release of Frozen ETH Pursuant to Court Order
Status: Amended following passed Temp Check
Authors: Aave Labs, KelpDAO, LayerZero, EtherFi, Compound
Date: 5/11/26
[Constitutional] AIP: Amended Release of Frozen ETH Pursuant to Court Order
Status: Amended following passed Temp Check
Authors: Aave Labs, KelpDAO, LayerZero, EtherFi, Compound
Date: 5/11/26
This amended Constitutional AIP updates the execution path for the previously posted proposal to release the frozen ETH secured by the Arbitrum Security Council in connection with the rsETH incident. Since then, a Court order was issued authorizing the transfer of the frozen ETH to a wallet controlled by Aave LLC and for Aave LLC to hold this frozen ETH while the court continues to deliberate.
This amendment preserves the intent approved in the Temp Check to transfer the frozen ETH, but it updates the recipient and custody mechanics so that the onchain execution complies with the recent Court order.
If this Constitutional AIP passes, the payload will transfer 30,765.667501709008927568 ETH from 0x0000000000000000000000000000000000000DA0 to the Aave LLC-controlled receiving address listed below.
Aave LLC receiving address:
0x3b87db6ded35eBD28EcbF8014fb325eef23f6C07
Court order: https://storage.courtlistener.com/recap/gov.uscourts.nysd.653423/gov.uscourts.nysd.653423.52.0.pdf
On April 21, 2026, the Arbitrum Security Council executed an emergency action to immobilize ETH connected to the rsETH incident. The ETH was moved to 0x0000000000000000000000000000000000000DA0 pending a subsequent governance action.
Then, on April 25, 2026, Aave Labs and others posted an AIP to approve the release of the 30,765.667501709008927568 ETH that the Arbitrum Security Council froze following the April 18 incident. That AIP proposed to release the recovered ETH into an ongoing, coordinated recovery effort with the goal of restoring the economic backing of rsETH. This original proposal completed the Temp Check process with overwhelming approval and strong delegate support.
The standard Arbitrum governance process uses Snapshot for Temp Checks and Tally for onchain execution, with Constitutional proposals targeting Arbitrum Core. Arbitrum's governance documentation also distinguishes between Constitutional and Non-Constitutional AIPs, and states that Constitutional proposals are submitted through Arbitrum Core on Tally.
After the Temp Check, plaintiffs holding judgments against North Korea served a restraining notice on Arbitrum DAO seeking to restrain the ETH immobilized as part of the recovery effort. Aave LLC filed an emergency motion to vacate the notice, and the Court held a hearing on May 6.
Following additional submissions from the parties, the Court accepted Aave LLC's proposed path. The Court entered an order authorizing an onchain Arbitrum DAO vote to transfer the immobilized ETH to Aave LLC, with the restraining order following the ETH and attaching to Aave LLC upon transfer.
This amended AIP updates the court order's execution path accordingly.
The goal of the original proposal remains unchanged. The frozen ETH is part of the broader recovery effort following the rsETH incident, and Arbitrum Governance has already signaled support for releasing the ETH rather than leaving it immobilized indefinitely.
However, on the evening (New York time) of Friday, May 1, 2026, a law firm representing plaintiff-judgment creditors in a case called Kim v. Democratic People's Republic of Korea, 25-MC-527 (S.D.N.Y.) served a restraining notice on "Arbitrum DAO" that threatened significant delay. Aave Labs acted as promptly as possible. On Monday May 4, 2026, Aave LLC, a US entity of Aave Labs, filed an emergency motion to vacate the restraining order. That motion was heard in oral arguments on May 6, 2026, and the substantive issues remain under consideration by the court. (We are grateful to the judge for her rapid response and thoughtful, ongoing consideration.)
On Friday, May 8, 2026, after an exchange of letters from the plaintiffs and Aave LLC, the court issued an order that the Restraining Notice issued to "Arbitrum DAO" is modified, so as to allow an on-chain vote to transfer the immobilized assets to a digital assets wallet controlled by Aave LLC. The judge specifically ordered that such a transfer process "will not be deemed to be a violation of the Restraining Notice," and that "[a]ny party initiating that on-chain transaction, voting with regard to that on-chain transaction, or participating in the on-chain transfer of assets to Aave LLC shall not be in violation of the Restraining Notice."
In other words, tokenholders are free to vote or otherwise participate in this process, without fear of violating the restraining notice. (Not legal advice; you are, of course, encouraged to consult your own attorney.)
The court reserved decision on all other matters in connection with the Restraining Notice and the Immobilized Assets, meaning that the central question on the merits -- whether and when the funds will be released for use in the recovery effort -- remains to be decided by the court.
After that transfer, and per the court's order, Aave LLC will abide by the terms of the Restraining Notice as if the Restraining Notice had been issued to Aave LLC, until and unless the Restraining Notice is vacated or further modified by the Court, is withdrawn or modified by Plaintiffs, or expires by operation of law. In other words, Aave LLC will not sell, assign, transfer, or interfere with these funds, until the court allows such actions.
We view this order as very helpful for the Arbitrum community. It allows the ETH to be transferred to Aave LLC, so that assuming the court agrees with Aave LLC's position that the funds may be used in the recovery efforts, that process will be logistically easier. Aave is grateful to the Arbitrum community for being a "Good Samaritan," and we are eager to ease any further administration burdens on the Arbitrum community.
This AIP amends the prior proposal titled:
[Constitutional] AIP: Approve Release of Frozen ETH
We note that the court's order forces a modification in the onchain AIP from the snapshot version. The original proposal was that the recipient address would be a 3-of-4 Gnosis Safe with signers from Aave, KelpDAO, EtherFi, and Certora. However, for administrative and legal convenience, and to be consistent with the court's order, the onchain vote will be that the recipient address will be to a wallet controlled by Aave LLC.
Aave will continue to coordinate with the relevant parties, and the goal remains the same. The ETH is intended to be applied in a neutral and non-discriminatory manner toward restoring rsETH's backing within the Kelp protocol. Every unit of ETH returned to the recovery effort narrows the backing shortfall and moves rsETH closer to full collateralization.
Accordingly, the amendment is limited to the recipient and custody mechanics.The original proposal requested release of the frozen ETH into the coordinated rsETH recovery effort. This amended proposal requests transfer of the frozen ETH to Aave LLC pursuant to the court order.
After the transfer, and per the court's order, Aave LLC will abide by the terms of the restraining notice as if the restraining notice had been issued to Aave LLC, until and unless the restraining notice is vacated or further modified by the Court, is withdrawn or modified by Plaintiffs, or expires by operation of law. In other words, Aave LLC will not sell, assign, transfer, or interfere with these funds, until the court allows such actions.
This Constitutional AIP authorizes the transfer of 30,765.667501709008927568 ETH from:
0x0000000000000000000000000000000000000DA0
to the following Aave LLC-controlled receiving address:
0x3b87db6ded35eBD28EcbF8014fb325eef23f6C07
The transfer is made pursuant to the Court order dated May 8, 2026, which authorizes an onchain Arbitrum DAO vote to move the immobilized ETH to Aave LLC and provides that the restraining order will follow the ETH and attach to Aave LLC upon transfer.
Aave LLC will comply with the restraining order while the Court continues to consider the matter.
This AIP does not authorize Aave LLC to distribute, transfer, pledge, encumber, stake, lend, swap, bridge, rehypothecate, or otherwise use the ETH unless permitted by the Court or applicable legal process.
This AIP does not request any new treasury allocation from Arbitrum DAO.
If this AIP passes, the payload will execute a transfer of 30,765.667501709008927568 ETH from 0x0000000000000000000000000000000000000DA0 to 0x3b87db6ded35eBD28EcbF8014fb325eef23f6C07.
The proposal will be submitted as a Constitutional AIP through Arbitrum Core. Arbitrum's proposal submission guide states that Constitutional proposals target Arbitrum Core, while Non-Constitutional proposals target Arbitrum Treasury.
Target source address:
0x0000000000000000000000000000000000000DA0
Recipient:
0x3b87db6ded35eBD28EcbF8014fb325eef23f6C07
Amount:
30,765.667501709008927568 ETH
Action:
Transfer ETH to Aave LLC-controlled receiving address pursuant to Court order.
Additional actions:
None.
Treasury spend:
None.
Legal Posture
The restraining notice previously served on Arbitrum DAO sought to restrain the ETH immobilized as part of the rsETH recovery effort. The Court has now entered an order authorizing an onchain Arbitrum DAO vote to transfer the ETH to Aave LLC, with the restraining order following the ETH and attaching to Aave LLC upon transfer.
Aave LLC will comply with the restraining order while the Court continues to consider the matter.
This means the onchain vote is not asking delegates to disregard the restraining order. It is asking delegates to approve the transfer path authorized by the Court.
The Court order is attached here: https://storage.courtlistener.com/recap/gov.uscourts.nysd.653423/gov.uscourts.nysd.653423.52.0.pdf
In parallel, the broader rsETH incident recovery plan continues.
On May 6, the identified thief positions on Aave V3 were liquidated. The retrieved rsETH collateral was transferred to the Recovery Guardian as specified in the preceding AIP approved by Aave DAO governance. Other users, including Umbrella stakers, were not impacted by this liquidation process.
The next phase of the plan focuses on restoring rsETH backing and returning affected markets to normal operation. On Arbitrum, the liquidated rsETH will be burned. Kelp will retire the corresponding LayerZero packet on Ethereum so that it cannot mint new rsETH on the receiving side. Together, those steps are intended to neutralize the inflated rsETH supply created by the exploit.
On Ethereum, the seized rsETH will be sent to the bridge lockbox. That ETH, together with committed ETH from the broader DeFi United coalition, is expected to restore the backing of the rsETH lockbox contract. Once the lockbox is backed, the bridge can resume normal operation.
Separately, replacement funds are expected to be borrowed as a contingency to reduce the timing impact on affected Aave users while the immobilized ETH remains subject to the Court process.
This section is provided for recovery context only. The onchain action authorized by this AIP is limited to the transfer of the frozen ETH to Aave LLC pursuant to the Court order.
No new treasury allocation is requested.
This proposal concerns ETH already immobilized on Arbitrum One in connection with the rsETH incident. The direct budgetary cost to Arbitrum DAO is expected to be zero outside of normal governance execution overhead.
This amendment is submitted to address the main risk of legal execution risk by aligning the transfer with the Court's order and by having the restraining order follow the ETH to Aave LLC upon transfer.
The proposal does not ask delegates to determine final ownership of the ETH. The Court process remains ongoing.
The proposal does not authorize immediate distribution to affected users. Aave LLC will comply with the restraining order while the Court continues to consider the matter.
The proposal does not create new Arbitrum DAO treasury exposure. It only authorizes transfer of ETH already immobilized as part of the Security Council emergency action.
The proposal changes the recipient from the originally contemplated recovery structure to Aave LLC. Because that is a material execution-path change after the Temp Check, the original coauthors have been asked to support this amendment before onchain submission.
First, the final payload will be prepared and submitted onchain.
Second, the Constitutional AIP will proceed to onchain vote through Arbitrum Core.
Third, if the AIP passes and execution occurs, the immobilized ETH will be transferred to the Aave LLC-controlled receiving address, with the restraining order following the ETH and attaching to Aave LLC upon transfer.
Arbitrum delegates are asked to vote FOR this amended Constitutional AIP.
A FOR vote approves the court-authorized transfer of 30,765.667501709008927568 ETH from 0x0000000000000000000000000000000000000DA0 to the Aave LLC-controlled receiving address listed in this proposal.
A FOR vote does not authorize distribution or use of the ETH while the restraining order remains in effect.
A FOR vote preserves the recovery objective supported by the Temp Check while updating the execution path to reflect the Court's order.
An AGAINST vote leaves the ETH immobilized at the current address unless and until another governance or legal path is approved.
I am voting FOR on the Snapshot to release the frozen ETH into the rsETH recovery efforts. In my view, routing the frozen ETH toward remediation is the best path to reducing harm for affected users in the Arbitrum ecosystem and DeFi more broadly, even if there are more granular details to be ironed out in the onchain vote.
Hey all,
Thanks to the 1,600+ addresses that have voted in favor of this proposal as we head into the final two days of voting.
In case anyone missed it, Aave LLC filed an emergency motion yesterday with the United States District Court for the Southern District of New York to vacate the restraining notice served on Arbitrum DAO on May 1, 2026 regarding the frozen ETH mentioned in this proposal.
Hey all,
Thanks to the 1,600+ addresses that have voted in favor of this proposal as we head into the final two days of voting.
In case anyone missed it, Aave LLC filed an emergency motion yesterday with the United States District Court for the Southern District of New York to vacate the restraining notice served on Arbitrum DAO on May 1, 2026 regarding the frozen ETH mentioned in this proposal.
The law is clear that a thief does not gain lawful ownership of stolen property simply by taking it. The ETH was recovered to be returned to users harmed in the April 18, 2026 exploit, and freezing it now harms the very people the ongoing recovery effort is designed to protect.
We've also asked the court for an expedited hearing and a temporary vacatur. We'll provide more updates as we have them and will continue working alongside the Arbitrum community and DeFi United to make affected users whole.
Those are great points.
Given the high visibility this entire situation is reaching, I also want to hear the opinions/input of Entropy, OCL, AF and the Security Council on the restriction notice.
We are deeply in favor of utilizing the funds to reback rsETH on Aave. We wanted to comment that we are also in alignment with equally distributing the funds, and we are happy to see other delegates agree. Our reasoning is that the funds did not come from Arbitrum's treasury, so Arbitrum does not necessarily have an extra claim to unique reimbursement. This shouldn't be an issue anyways because it seems Defi United has raised enough funds, ideally avoiding the haircut altogether.
Lastly we are in favor of speeding up the process in any way possible. We thought @daniel 's idea #1 of getting someone to loan the 30765 ETH was great. If it's impossible to find someone to loan that much out individually, perhaps Defi United can add an option to loan eth---and then the frozen rsEth can be used to pay them back once the proposal passes.
Dear Arbitrum DAO,
My name is Charlie Gerstein, and I represent the plaintiff-judgment creditors in Kim v. Democratic Peoples Republic of Korea, 25-MC-527 (S.D.N.Y.), and related cases. The United States District Court for the Southern District of New York has authorized me to serve on Arbitrum DAO a restraining notice and three writs of execution. You can find these documents here: Service in Arbitrum. The text of the restraining notice is pasted below:
I want to start by acknowledging the users impacted by this incident. Many have been put in a difficult position through no fault of their own, and as @Entropy pointed out, in some cases the costs are continuing to accrue daily. I also want to recognize the broader ecosystem response here: the coordination and contributions through the DeFi United effort are encouraging and reflect a meaningful commitment to making affected users whole and ensuring that DeFi will win.
At a high level, I support releasing the frozen ETH. I also agree that time matters and the governance process can be accelerated, but there is some nuance here. Specifically, my suggestion is to skip the temp check, but use part of that saved time for a few additional days of forum discussion so delegates can resolve any remaining questions before this unprecedented vote moves onchain.
Thanks Entropy for the breakdown and sharing your view. Slight correction to the information you shared about the structure of the proposal: Aave shared in their comment that based on community feedback, they have upgraded the 2/3 multisig to a 3/4 multisig, adding EtherFi as a signer.
Thanks Entropy for the breakdown and sharing your view. Slight correction to the information you shared about the structure of the proposal: Aave shared in their comment that based on community feedback, they have upgraded the 2/3 multisig to a 3/4 multisig, adding EtherFi as a signer.
Per community feedback, the recovery address multi-sig has been upgraded from a 2/3 multi-sig to a 3/4 multi-sig. EtherFi has been added as the fourth signatory and currently has a proposal in progress to donate 5,000 ETH to the ongoing DeFi United effort.
I am voting FOR on the Snapshot to release the frozen ETH into the rsETH recovery efforts. In my view, routing the frozen ETH toward remediation is the best path to reducing harm for affected users in the Arbitrum ecosystem and DeFi more broadly, even if there are more granular details to be ironed out in the onchain vote.
Hey all,
Thanks to the 1,600+ addresses that have voted in favor of this proposal as we head into the final two days of voting.
In case anyone missed it, Aave LLC filed an emergency motion yesterday with the United States District Court for the Southern District of New York to vacate the restraining notice served on Arbitrum DAO on May 1, 2026 regarding the frozen ETH mentioned in this proposal.
Hey all,
Thanks to the 1,600+ addresses that have voted in favor of this proposal as we head into the final two days of voting.
In case anyone missed it, Aave LLC filed an emergency motion yesterday with the United States District Court for the Southern District of New York to vacate the restraining notice served on Arbitrum DAO on May 1, 2026 regarding the frozen ETH mentioned in this proposal.
The law is clear that a thief does not gain lawful ownership of stolen property simply by taking it. The ETH was recovered to be returned to users harmed in the April 18, 2026 exploit, and freezing it now harms the very people the ongoing recovery effort is designed to protect.
We've also asked the court for an expedited hearing and a temporary vacatur. We'll provide more updates as we have them and will continue working alongside the Arbitrum community and DeFi United to make affected users whole.
Those are great points.
Given the high visibility this entire situation is reaching, I also want to hear the opinions/input of Entropy, OCL, AF and the Security Council on the restriction notice.
We are deeply in favor of utilizing the funds to reback rsETH on Aave. We wanted to comment that we are also in alignment with equally distributing the funds, and we are happy to see other delegates agree. Our reasoning is that the funds did not come from Arbitrum's treasury, so Arbitrum does not necessarily have an extra claim to unique reimbursement. This shouldn't be an issue anyways because it seems Defi United has raised enough funds, ideally avoiding the haircut altogether.
Lastly we are in favor of speeding up the process in any way possible. We thought @daniel 's idea #1 of getting someone to loan the 30765 ETH was great. If it's impossible to find someone to loan that much out individually, perhaps Defi United can add an option to loan eth---and then the frozen rsEth can be used to pay them back once the proposal passes.
Dear Arbitrum DAO,
My name is Charlie Gerstein, and I represent the plaintiff-judgment creditors in Kim v. Democratic Peoples Republic of Korea, 25-MC-527 (S.D.N.Y.), and related cases. The United States District Court for the Southern District of New York has authorized me to serve on Arbitrum DAO a restraining notice and three writs of execution. You can find these documents here: Service in Arbitrum. The text of the restraining notice is pasted below:
I want to start by acknowledging the users impacted by this incident. Many have been put in a difficult position through no fault of their own, and as @Entropy pointed out, in some cases the costs are continuing to accrue daily. I also want to recognize the broader ecosystem response here: the coordination and contributions through the DeFi United effort are encouraging and reflect a meaningful commitment to making affected users whole and ensuring that DeFi will win.
At a high level, I support releasing the frozen ETH. I also agree that time matters and the governance process can be accelerated, but there is some nuance here. Specifically, my suggestion is to skip the temp check, but use part of that saved time for a few additional days of forum discussion so delegates can resolve any remaining questions before this unprecedented vote moves onchain.
Thanks Entropy for the breakdown and sharing your view. Slight correction to the information you shared about the structure of the proposal: Aave shared in their comment that based on community feedback, they have upgraded the 2/3 multisig to a 3/4 multisig, adding EtherFi as a signer.
Thanks Entropy for the breakdown and sharing your view. Slight correction to the information you shared about the structure of the proposal: Aave shared in their comment that based on community feedback, they have upgraded the 2/3 multisig to a 3/4 multisig, adding EtherFi as a signer.
Per community feedback, the recovery address multi-sig has been upgraded from a 2/3 multi-sig to a 3/4 multi-sig. EtherFi has been added as the fourth signatory and currently has a proposal in progress to donate 5,000 ETH to the ongoing DeFi United effort.
Dear Arbitrum DAO,
My name is Charlie Gerstein, and I represent the plaintiff-judgment creditors in Kim v. Democratic Peoples Republic of Korea, 25-MC-527 (S.D.N.Y.), and related cases. The United States District Court for the Southern District of New York has authorized me to serve on Arbitrum DAO a restraining notice and three writs of execution. You can find these documents here: Service in Arbitrum. The text of the restraining notice is pasted below:
To: Arbitrum DAO
GREETING:
WHEREAS, in an action in the United States District Court for the District of Columbia between Han Kim and Yong Kim, Plaintiffs, and Democratic People's Republic of Korea, Defendant, a judgment was entered therein on April 9, 2015, in favor of Han Kim and Yong Kim, the Judgment Creditors, and against Democratic People's Republic of Korea, the Judgment Debtor, for the sum of $15,000,000 ($15 million) in favor of Han Kim and $15,000,000 ($15 million) in favor of Yong Kim, and an additional $300,000,000 ($300 million) collectively to Han Kim and Yong Kim, and
WHEREAS, that judgment has been registered in the United States District Court for the Southern District of New York, see Dkt. 1, AO-451 Registration of Judgment, Kim v. Democratic People's Republic of Korea, No. 25-MC-527 (S.D.N.Y.), and
WHEREAS, the sum of the Kim judgment-creditors' compensatory and punitive damages is now due and owing with interest accruing from April 9, 2015, and
WHEREAS, in an action in the United States District Court for the District of Columbia between Chaim Kaplan, et al., and the Democratic People's Republic of Korea, et al., a judgment was entered therein on September 30, 2016, in favor of Chaim Kaplan, et al., the Judgment Creditors, and against the Democratic People's Republic of Korea, et al., Judgment Debtors, with damages in favor of Judgment-Creditors for $38,161,966.67 in compensatory damages and $131,277,165.34 in punitive damages, and
WHEREAS, that judgment has been registered in the United States District Court for the Southern District of New York, see Dkt. 1, AO-451 Registration of Judgment, In re: Central Bank of the Islamic Republic of Iran, et al., No. 26-MC-33 (S.D.N.Y.), and
WHEREAS, the sum of the Kaplan judgment-creditors' compensatory and punitive damages is now due and owing with interest accruing from September 30, 2016, and
WHEREAS, in an action in the United States District Court for the District of Puerto Rico between Ruth Calderon-Cardona, et al., Plaintiffs, and Democratic People's Republic of Korea, et al., Defendants, a judgment was entered therein on August 5, 2010, in favor of Ruth Calderon-Cardona et al., Judgment Creditors, and against Democratic People's Republic of Korea et al., the Judgment Debtors, for the sum of $78,000,000, with an additional $300,000,000 in punitive damages to Judgment-Creditors, and
WHEREAS, that judgment has been registered in the United States District Court for the Southern District of New York, see Dkt. 1, AO-451 Registration of Judgment, Calderon-Cardona et al. v. Democratic People's Republic of Korea et al., No. 26-MC-94 (S.D.N.Y.), and
WHEREAS, the sum of the Calderon-Cardona judgment-creditors' compensatory and punitive damages is now due and owing with interest accruing from August 5, 2010, and
WHEREAS, it appears that you are in possession or custody of property in which the Judgment Debtor has an interest, specifically: assets, funds, and property interests of the Democratic People's Republic of Korea, including but not limited to the digital ledger balance at address 0x0000000000000000000000000000000000000DA0 on the Arbitrum One blockchain.
TAKE NOTICE that pursuant to CPLR §5222(b), set forth fully below, you are hereby forbidden to make or suffer any sale, assignment, transfer or interference with any property in which the Democratic People's Republic of Korea, a/k/a North Korea, has or is known or believed to have an interest, including but not limited to property held through any agency, instrumentality, controlled person, or controlled entity of the Democratic People's Republic of Korea, including, but not limited to, APT-38 and the Lazarus Group, except upon direction of the sheriff or pursuant to an order of the court.
TAKE FURTHER NOTICE that this Restraining Notice also covers all property in which the above-named Judgment Debtor has an interest hereafter coming into your possession or custody, and all debts hereafter coming due from you to the Judgment Debtor.
CIVIL PRACTICE LAW AND RULES §5222(b)
Effect of restraint; prohibition of transfer; duration: A judgment debtor or obligor served with a restraining notice is forbidden to make or suffer any sale, assignment, transfer or interference with any property in which he or she has an interest, except as set forth in subdivisions (h) and (i) of this section, and except upon direction of the sheriff or pursuant to an order of the court, until the judgment or order is satisfied or vacated. A restraining notice served upon a person other than the judgment debtor or obligor is effective only if, at the time of service, he or she owes a debt to the judgment debtor or obligor or he or she is in the possession or custody of property in which he or she knows or has reason to believe the judgment debtor or obligor has an interest, or if the judgment creditor or support collection unit has stated in the notice that a specified debt is owed by the person served to the judgment debtor or obligor or that the judgment debtor or obligor has an interest in specified property in the possession or custody of the person served. All property in which the judgment debtor or obligor is known or believed to have an interest then in and thereafter coming into the possession or custody of such a person, including any specified in the notice, and all debts of such a person, including any specified in the notice, then due and thereafter coming due to the judgment debtor or obligor, shall be subject to the notice, except as set forth in subdivisions (h) and (i) of this section. Such a person is forbidden to make or suffer any sale, assignment or transfer of, or any interference with, any such property, or pay over or otherwise dispose of any such debt, to any person other than the sheriff or the support collection unit, except as set forth in subdivisions (h) and (i) of this section, except upon direction of the sheriff or pursuant to an order of the court, until the expiration of one year after the notice is served upon him or her, or until the judgment or order is satisfied or vacated, whichever event first occurs. A judgment creditor or support collection unit which has specified personal property or debt in a restraining notice shall be liable to the owner of the property or the person to whom the debt is owed, if other than the judgment debtor or obligor, for any damages sustained by reason of the restraint. If a garnishee served with a restraining notice withholds the payment of money belonging or owed to the judgment debtor or obligor in an amount equal to twice the amount due on the judgment or order, the restraining notice is not effective as to other property or money.
TAKE FURTHER NOTICE, that disobedience of this Restraining Notice is punishable as a contempt of court.
Dated: April 30, 2026
[u]/s/ Charles Gerstein[/u]
Charles Gerstein
Gerstein Harrow LLP
1629 Columbia Road NW, Suite 302
Washington, DC 20009
(202) 670-4809
[u]/s/ Jason Harrow[/u]
Jason Harrow
Gerstein Harrow LLP
401 Park Ave. S. 10th Floor
New York, NY 10016
(323) 744-5293
[u]/s/ Robert Tolchin[/u]
Robert Tolchin
The Berkman Law Office LLC
829 E. 15th Street, Suite Seven
Brooklyn, New York 11230
(718) 855-3627
Attorneys for Judgment Creditors
I want to start by acknowledging the users impacted by this incident. Many have been put in a difficult position through no fault of their own, and as @Entropy pointed out, in some cases the costs are continuing to accrue daily. I also want to recognize the broader ecosystem response here: the coordination and contributions through the DeFi United effort are encouraging and reflect a meaningful commitment to making affected users whole and ensuring that DeFi will win.
At a high level, I support releasing the frozen ETH. I also agree that time matters and the governance process can be accelerated, but there is some nuance here. Specifically, my suggestion is to skip the temp check, but use part of that saved time for a few additional days of forum discussion so delegates can resolve any remaining questions before this unprecedented vote moves onchain.
In particular, I want to double-click on what @TodayInDeFi brought up in their comment. I still do not fully understand whether the Arbitrum Captive Insurance Product (CIP) provides delegates with sufficient protection here, or whether there remains a meaningful gap relative to the Foundation and Security Council if coverage is denied, capped, or exhausted.That may be manageable, but I do not think it is a trivial point.
I also think Entropy raises a fair concern regarding Aave users who continue to incur interest while the funds remain frozen. If the coordinated recovery effort is genuinely intended to make users whole, then it seems worth discussing whether those incremental interest costs can also be covered. If that is feasible, I would rather spend a few more days resolving the remaining issues properly than compress discussion solely because delay has an economic cost.
I support releasing the frozen ETH to DeFi United's effort without any waterfall distribution conditions.
That said, this situation also exposes a real governance gap Arbitrum DAO currently has no formal framework for how Security Council-frozen assets should be handled when the exploit is external to the Arbitrum Protocol itself. Solving this ad hoc every time sets unclear precedents and adds unnecessary urgency pressure on delegates.
I support releasing the frozen ETH to DeFi United's effort without any waterfall distribution conditions.
That said, this situation also exposes a real governance gap Arbitrum DAO currently has no formal framework for how Security Council-frozen assets should be handled when the exploit is external to the Arbitrum Protocol itself. Solving this ad hoc every time sets unclear precedents and adds unnecessary urgency pressure on delegates.
It may be worth the community considering a clear "Frozen Asset Release Policy" for future incidents defining distribution logic, SC scope boundaries, and emergency thresholds so the DAO isn't caught reactive each time. @AaveLabs @OliverBuilds @dzack23
Thank you Arbitrum for seizing the stolen tokens, now do the right thing and return the stolen goods. The multi project initiative DEFI United is completely trusted as is Aave, everyone already knows this. Please don't drag this on.
Thanks in advance from by seized/held WETH bags on AAVE.
I also wanted to swing by and say thanks to the DAO for having us on today's governance call. We are really grateful for the feedback, support, and guidance so far.
Greetings Arbitrum community,
Thank you to all of the delegates and community members who have engaged with this proposal. Across the comments, a set of common questions has emerged. We have grouped the feedback into the themes below and addressed each one directly. The points raised by Nicksta, Griff, MconnectDAO, 0xDonPepe, Zeptimus, and OliverBuilds are reflected in the answers that follow.
Greetings Arbitrum community,
Thank you to all of the delegates and community members who have engaged with this proposal. Across the comments, a set of common questions has emerged. We have grouped the feedback into the themes below and addressed each one directly. The points raised by Nicksta, Griff, MconnectDAO, 0xDonPepe, Zeptimus, and OliverBuilds are reflected in the answers that follow.
Multi-sig Update
Per community feedback, the recovery address multi-sig has been upgraded from a 2/3 multi-sig to a 3/4 multi-sig. EtherFi has been added as the fourth signatory and currently has a proposal in progress to donate 5,000 ETH to the ongoing DeFi United effort.
rsETH Backing Technical Implementation Plan Update
DeFi United, a coalition of ecosystem participants, has issued the technical implementation plan to restore the KelpDAO rsETH backing following the April 18 incident. The plan covers the technical details on how rsETH's backing will be restored, how the exploiter's positions will be cleared up across Aave and Compound, and all other technical steps required to make rsETH whole and resume normal market operations. Find it here.
Can the timeline be expedited?
Attendees at the Arbitrum governance call, commenters on this forum post, and DAO participants in direct conversation have expressed interest in moving faster where the framework allows. Given the urgency of the situation, we are prepared to support an expedited pathway if delegates so choose and we welcome guidance on what that would look like. If the DAO prefers to proceed through the standard Constitutional AIP process, we respect that decision as well and hope to stay aligned with the Arbitrum DAO on best next steps.
What happens in a full recovery versus a partial recovery, and is there a distribution waterfall?
The recovery effort has been sized against the full backing shortfall, funded in advance through a combination of capital commitments from participating parties, ongoing treasury proposals, and other contributions sourced across DeFi United.
Arbitrum users who held rsETH prior to the exploit benefit through the same mechanism as all other rsETH holders, which is restoration of backing at the asset level. Because the recovery is funded to close the shortfall in full, no shortfall analysis or user-level distribution calculation is required.
For that reason, the proposal does not include a distribution waterfall. A waterfall mechanism is designed to prioritize one group of users over another in a partial recovery scenario, which is precisely the outcome this coordinated effort has been structured to prevent.
How are Arbitrum users being impacted?
With rsETH backing set to be restored in full, Arbitrum users and protocols can expect the shortfall to be closed. On Aave's Arbitrum market, that means rsETH-collateralized positions are not expected to face incident-driven liquidations tied to the backing shortfall, and the market is not expected to absorb bad debt from this incident. WETH suppliers to the Arbitrum market benefit accordingly.
Will there be post-recovery reporting and verification?
Once the recovery is complete, we will publish a full account of how rsETH backing was restored, how affected markets (including Aave and Compound) were managed, what steps were taken by KelpDAO and LayerZero, and confirmation that funds were applied solely toward making rsETH users whole.
Aave Labs
Dear Arbitrum DAO,
My name is Charlie Gerstein, and I represent the plaintiff-judgment creditors in Kim v. Democratic Peoples Republic of Korea, 25-MC-527 (S.D.N.Y.), and related cases. The United States District Court for the Southern District of New York has authorized me to serve on Arbitrum DAO a restraining notice and three writs of execution. You can find these documents here: Service in Arbitrum. The text of the restraining notice is pasted below:
To: Arbitrum DAO
GREETING:
WHEREAS, in an action in the United States District Court for the District of Columbia between Han Kim and Yong Kim, Plaintiffs, and Democratic People's Republic of Korea, Defendant, a judgment was entered therein on April 9, 2015, in favor of Han Kim and Yong Kim, the Judgment Creditors, and against Democratic People's Republic of Korea, the Judgment Debtor, for the sum of $15,000,000 ($15 million) in favor of Han Kim and $15,000,000 ($15 million) in favor of Yong Kim, and an additional $300,000,000 ($300 million) collectively to Han Kim and Yong Kim, and
WHEREAS, that judgment has been registered in the United States District Court for the Southern District of New York, see Dkt. 1, AO-451 Registration of Judgment, Kim v. Democratic People's Republic of Korea, No. 25-MC-527 (S.D.N.Y.), and
WHEREAS, the sum of the Kim judgment-creditors' compensatory and punitive damages is now due and owing with interest accruing from April 9, 2015, and
WHEREAS, in an action in the United States District Court for the District of Columbia between Chaim Kaplan, et al., and the Democratic People's Republic of Korea, et al., a judgment was entered therein on September 30, 2016, in favor of Chaim Kaplan, et al., the Judgment Creditors, and against the Democratic People's Republic of Korea, et al., Judgment Debtors, with damages in favor of Judgment-Creditors for $38,161,966.67 in compensatory damages and $131,277,165.34 in punitive damages, and
WHEREAS, that judgment has been registered in the United States District Court for the Southern District of New York, see Dkt. 1, AO-451 Registration of Judgment, In re: Central Bank of the Islamic Republic of Iran, et al., No. 26-MC-33 (S.D.N.Y.), and
WHEREAS, the sum of the Kaplan judgment-creditors' compensatory and punitive damages is now due and owing with interest accruing from September 30, 2016, and
WHEREAS, in an action in the United States District Court for the District of Puerto Rico between Ruth Calderon-Cardona, et al., Plaintiffs, and Democratic People's Republic of Korea, et al., Defendants, a judgment was entered therein on August 5, 2010, in favor of Ruth Calderon-Cardona et al., Judgment Creditors, and against Democratic People's Republic of Korea et al., the Judgment Debtors, for the sum of $78,000,000, with an additional $300,000,000 in punitive damages to Judgment-Creditors, and
WHEREAS, that judgment has been registered in the United States District Court for the Southern District of New York, see Dkt. 1, AO-451 Registration of Judgment, Calderon-Cardona et al. v. Democratic People's Republic of Korea et al., No. 26-MC-94 (S.D.N.Y.), and
WHEREAS, the sum of the Calderon-Cardona judgment-creditors' compensatory and punitive damages is now due and owing with interest accruing from August 5, 2010, and
WHEREAS, it appears that you are in possession or custody of property in which the Judgment Debtor has an interest, specifically: assets, funds, and property interests of the Democratic People's Republic of Korea, including but not limited to the digital ledger balance at address 0x0000000000000000000000000000000000000DA0 on the Arbitrum One blockchain.
TAKE NOTICE that pursuant to CPLR §5222(b), set forth fully below, you are hereby forbidden to make or suffer any sale, assignment, transfer or interference with any property in which the Democratic People's Republic of Korea, a/k/a North Korea, has or is known or believed to have an interest, including but not limited to property held through any agency, instrumentality, controlled person, or controlled entity of the Democratic People's Republic of Korea, including, but not limited to, APT-38 and the Lazarus Group, except upon direction of the sheriff or pursuant to an order of the court.
TAKE FURTHER NOTICE that this Restraining Notice also covers all property in which the above-named Judgment Debtor has an interest hereafter coming into your possession or custody, and all debts hereafter coming due from you to the Judgment Debtor.
CIVIL PRACTICE LAW AND RULES §5222(b)
Effect of restraint; prohibition of transfer; duration: A judgment debtor or obligor served with a restraining notice is forbidden to make or suffer any sale, assignment, transfer or interference with any property in which he or she has an interest, except as set forth in subdivisions (h) and (i) of this section, and except upon direction of the sheriff or pursuant to an order of the court, until the judgment or order is satisfied or vacated. A restraining notice served upon a person other than the judgment debtor or obligor is effective only if, at the time of service, he or she owes a debt to the judgment debtor or obligor or he or she is in the possession or custody of property in which he or she knows or has reason to believe the judgment debtor or obligor has an interest, or if the judgment creditor or support collection unit has stated in the notice that a specified debt is owed by the person served to the judgment debtor or obligor or that the judgment debtor or obligor has an interest in specified property in the possession or custody of the person served. All property in which the judgment debtor or obligor is known or believed to have an interest then in and thereafter coming into the possession or custody of such a person, including any specified in the notice, and all debts of such a person, including any specified in the notice, then due and thereafter coming due to the judgment debtor or obligor, shall be subject to the notice, except as set forth in subdivisions (h) and (i) of this section. Such a person is forbidden to make or suffer any sale, assignment or transfer of, or any interference with, any such property, or pay over or otherwise dispose of any such debt, to any person other than the sheriff or the support collection unit, except as set forth in subdivisions (h) and (i) of this section, except upon direction of the sheriff or pursuant to an order of the court, until the expiration of one year after the notice is served upon him or her, or until the judgment or order is satisfied or vacated, whichever event first occurs. A judgment creditor or support collection unit which has specified personal property or debt in a restraining notice shall be liable to the owner of the property or the person to whom the debt is owed, if other than the judgment debtor or obligor, for any damages sustained by reason of the restraint. If a garnishee served with a restraining notice withholds the payment of money belonging or owed to the judgment debtor or obligor in an amount equal to twice the amount due on the judgment or order, the restraining notice is not effective as to other property or money.
TAKE FURTHER NOTICE, that disobedience of this Restraining Notice is punishable as a contempt of court.
Dated: April 30, 2026
[u]/s/ Charles Gerstein[/u]
Charles Gerstein
Gerstein Harrow LLP
1629 Columbia Road NW, Suite 302
Washington, DC 20009
(202) 670-4809
[u]/s/ Jason Harrow[/u]
Jason Harrow
Gerstein Harrow LLP
401 Park Ave. S. 10th Floor
New York, NY 10016
(323) 744-5293
[u]/s/ Robert Tolchin[/u]
Robert Tolchin
The Berkman Law Office LLC
829 E. 15th Street, Suite Seven
Brooklyn, New York 11230
(718) 855-3627
Attorneys for Judgment Creditors
I want to start by acknowledging the users impacted by this incident. Many have been put in a difficult position through no fault of their own, and as @Entropy pointed out, in some cases the costs are continuing to accrue daily. I also want to recognize the broader ecosystem response here: the coordination and contributions through the DeFi United effort are encouraging and reflect a meaningful commitment to making affected users whole and ensuring that DeFi will win.
At a high level, I support releasing the frozen ETH. I also agree that time matters and the governance process can be accelerated, but there is some nuance here. Specifically, my suggestion is to skip the temp check, but use part of that saved time for a few additional days of forum discussion so delegates can resolve any remaining questions before this unprecedented vote moves onchain.
In particular, I want to double-click on what @TodayInDeFi brought up in their comment. I still do not fully understand whether the Arbitrum Captive Insurance Product (CIP) provides delegates with sufficient protection here, or whether there remains a meaningful gap relative to the Foundation and Security Council if coverage is denied, capped, or exhausted.That may be manageable, but I do not think it is a trivial point.
I also think Entropy raises a fair concern regarding Aave users who continue to incur interest while the funds remain frozen. If the coordinated recovery effort is genuinely intended to make users whole, then it seems worth discussing whether those incremental interest costs can also be covered. If that is feasible, I would rather spend a few more days resolving the remaining issues properly than compress discussion solely because delay has an economic cost.
I support releasing the frozen ETH to DeFi United's effort without any waterfall distribution conditions.
That said, this situation also exposes a real governance gap Arbitrum DAO currently has no formal framework for how Security Council-frozen assets should be handled when the exploit is external to the Arbitrum Protocol itself. Solving this ad hoc every time sets unclear precedents and adds unnecessary urgency pressure on delegates.
I support releasing the frozen ETH to DeFi United's effort without any waterfall distribution conditions.
That said, this situation also exposes a real governance gap Arbitrum DAO currently has no formal framework for how Security Council-frozen assets should be handled when the exploit is external to the Arbitrum Protocol itself. Solving this ad hoc every time sets unclear precedents and adds unnecessary urgency pressure on delegates.
It may be worth the community considering a clear "Frozen Asset Release Policy" for future incidents defining distribution logic, SC scope boundaries, and emergency thresholds so the DAO isn't caught reactive each time. @AaveLabs @OliverBuilds @dzack23
Thank you Arbitrum for seizing the stolen tokens, now do the right thing and return the stolen goods. The multi project initiative DEFI United is completely trusted as is Aave, everyone already knows this. Please don't drag this on.
Thanks in advance from by seized/held WETH bags on AAVE.
I also wanted to swing by and say thanks to the DAO for having us on today's governance call. We are really grateful for the feedback, support, and guidance so far.
Greetings Arbitrum community,
Thank you to all of the delegates and community members who have engaged with this proposal. Across the comments, a set of common questions has emerged. We have grouped the feedback into the themes below and addressed each one directly. The points raised by Nicksta, Griff, MconnectDAO, 0xDonPepe, Zeptimus, and OliverBuilds are reflected in the answers that follow.
Greetings Arbitrum community,
Thank you to all of the delegates and community members who have engaged with this proposal. Across the comments, a set of common questions has emerged. We have grouped the feedback into the themes below and addressed each one directly. The points raised by Nicksta, Griff, MconnectDAO, 0xDonPepe, Zeptimus, and OliverBuilds are reflected in the answers that follow.
Multi-sig Update
Per community feedback, the recovery address multi-sig has been upgraded from a 2/3 multi-sig to a 3/4 multi-sig. EtherFi has been added as the fourth signatory and currently has a proposal in progress to donate 5,000 ETH to the ongoing DeFi United effort.
rsETH Backing Technical Implementation Plan Update
DeFi United, a coalition of ecosystem participants, has issued the technical implementation plan to restore the KelpDAO rsETH backing following the April 18 incident. The plan covers the technical details on how rsETH's backing will be restored, how the exploiter's positions will be cleared up across Aave and Compound, and all other technical steps required to make rsETH whole and resume normal market operations. Find it here.
Can the timeline be expedited?
Attendees at the Arbitrum governance call, commenters on this forum post, and DAO participants in direct conversation have expressed interest in moving faster where the framework allows. Given the urgency of the situation, we are prepared to support an expedited pathway if delegates so choose and we welcome guidance on what that would look like. If the DAO prefers to proceed through the standard Constitutional AIP process, we respect that decision as well and hope to stay aligned with the Arbitrum DAO on best next steps.
What happens in a full recovery versus a partial recovery, and is there a distribution waterfall?
The recovery effort has been sized against the full backing shortfall, funded in advance through a combination of capital commitments from participating parties, ongoing treasury proposals, and other contributions sourced across DeFi United.
Arbitrum users who held rsETH prior to the exploit benefit through the same mechanism as all other rsETH holders, which is restoration of backing at the asset level. Because the recovery is funded to close the shortfall in full, no shortfall analysis or user-level distribution calculation is required.
For that reason, the proposal does not include a distribution waterfall. A waterfall mechanism is designed to prioritize one group of users over another in a partial recovery scenario, which is precisely the outcome this coordinated effort has been structured to prevent.
How are Arbitrum users being impacted?
With rsETH backing set to be restored in full, Arbitrum users and protocols can expect the shortfall to be closed. On Aave's Arbitrum market, that means rsETH-collateralized positions are not expected to face incident-driven liquidations tied to the backing shortfall, and the market is not expected to absorb bad debt from this incident. WETH suppliers to the Arbitrum market benefit accordingly.
Will there be post-recovery reporting and verification?
Once the recovery is complete, we will publish a full account of how rsETH backing was restored, how affected markets (including Aave and Compound) were managed, what steps were taken by KelpDAO and LayerZero, and confirmation that funds were applied solely toward making rsETH users whole.
Aave Labs
Thanks, it's a good proposal and I support it in principle. I'll go through the strengths here, the points that still need to be addressed, and note where this aligns with other comments above.
TLDR - The frozen exploit-linked ETH should be used to reduce user harm and leaving the funds immobilized doesn't help anyone. The destination is clear, but the distribution logic isn't clear enough and the proposal isnt ready for on-chain execution in its current form.
Thanks, it's a good proposal and I support it in principle. I'll go through the strengths here, the points that still need to be addressed, and note where this aligns with other comments above.
TLDR - The frozen exploit-linked ETH should be used to reduce user harm and leaving the funds immobilized doesn't help anyone. The destination is clear, but the distribution logic isn't clear enough and the proposal isnt ready for on-chain execution in its current form.
Strengths
Clarification needed (and suggestions that might help)
In a nutshell, it's good to move to Snapshot quickly but do not support on-chain execution until the following are added:
A few quick observations from a governance standpoint:
Supportive of the intent frozen exploit funds being returned to affected users is the right outcome, and the indemnification from Aave Labs meaningfully reduces risk for the Arbitrum Foundation.
Two questions I'd like clarity on before Temperature Check:
A few quick observations from a governance standpoint:
Supportive of the intent frozen exploit funds being returned to affected users is the right outcome, and the indemnification from Aave Labs meaningfully reduces risk for the Arbitrum Foundation.
Two questions I'd like clarity on before Temperature Check:
Will there be an on-chain or public report after recovery detailing how funds were distributed and to whom?
If recovery is only partial, what's the concrete plan beyond "return to Arbitrum Governance for further direction"?
The 2-of-3 Safe structure is reasonable, but accountability doesn't end at fund release it ends at verified distribution.
@AaveLabs
Good proposal in overall. The only things that concerns me is the timeline. It can take up to 49 days to release the frozen ETH. Many parties have open positions on AAVE that might run into problem if they have to wait 49 days. Is it possible to speed up this proces of unfreezing the ETH. I've got the feeling there is a broad consensus the frozen ETH should be used to resolve the situation.
Thanks, it's a good proposal and I support it in principle. I'll go through the strengths here, the points that still need to be addressed, and note where this aligns with other comments above.
TLDR - The frozen exploit-linked ETH should be used to reduce user harm and leaving the funds immobilized doesn't help anyone. The destination is clear, but the distribution logic isn't clear enough and the proposal isnt ready for on-chain execution in its current form.
Thanks, it's a good proposal and I support it in principle. I'll go through the strengths here, the points that still need to be addressed, and note where this aligns with other comments above.
TLDR - The frozen exploit-linked ETH should be used to reduce user harm and leaving the funds immobilized doesn't help anyone. The destination is clear, but the distribution logic isn't clear enough and the proposal isnt ready for on-chain execution in its current form.
Strengths
Clarification needed (and suggestions that might help)
In a nutshell, it's good to move to Snapshot quickly but do not support on-chain execution until the following are added:
A few quick observations from a governance standpoint:
Supportive of the intent frozen exploit funds being returned to affected users is the right outcome, and the indemnification from Aave Labs meaningfully reduces risk for the Arbitrum Foundation.
Two questions I'd like clarity on before Temperature Check:
A few quick observations from a governance standpoint:
Supportive of the intent frozen exploit funds being returned to affected users is the right outcome, and the indemnification from Aave Labs meaningfully reduces risk for the Arbitrum Foundation.
Two questions I'd like clarity on before Temperature Check:
Will there be an on-chain or public report after recovery detailing how funds were distributed and to whom?
If recovery is only partial, what's the concrete plan beyond "return to Arbitrum Governance for further direction"?
The 2-of-3 Safe structure is reasonable, but accountability doesn't end at fund release it ends at verified distribution.
@AaveLabs
Good proposal in overall. The only things that concerns me is the timeline. It can take up to 49 days to release the frozen ETH. Many parties have open positions on AAVE that might run into problem if they have to wait 49 days. Is it possible to speed up this proces of unfreezing the ETH. I've got the feeling there is a broad consensus the frozen ETH should be used to resolve the situation.
The action contract has been verified. Thanks for flagging!
Hi all,
The court has authorised the on-chain vote to transfer all frozen ETH to a wallet controlled by Aave LLC:
Hi all,
The court has authorised the on-chain vote to transfer all frozen ETH to a wallet controlled by Aave LLC:
“The transfer process described in the prior paragraph will not be deemed to be a violation of the Restraining Notice. Any party initiating that on-chain transaction, voting with regard to that on-chain transaction, or participating in the on-chain transfer of assets to Aave LLC shall not be in violation of the Restraining Notice” - Court Order
The restraining notice will follow the assets to Aave LLC who have agreed to comply with it as confirmed in the updated proposal.
With this in mind, the Arbitrum Foundation believes the DAO should continue with the governance process.
The on-chain vote for the Constitutional AIP is now available.
The Arbitrum Foundation is aware of recent filings related to the Kim v. Democratic People’s Republic of Korea case, including actions involving third-party protocols.
We are closely monitoring developments, including recent statements and filings made by Aave, and are in active consultation with counsel to assess the situation.
The Arbitrum Foundation is aware of recent filings related to the Kim v. Democratic People’s Republic of Korea case, including actions involving third-party protocols.
We are closely monitoring developments, including recent statements and filings made by Aave, and are in active consultation with counsel to assess the situation.
Given the fluid nature of this matter, we are carefully evaluating potential next steps to ensure any response is measured, appropriate, and aligned with the long-term interests of the Arbitrum community.
We will provide further updates as we get greater clarity.
The action contract has been verified. Thanks for flagging!
Hi all,
The court has authorised the on-chain vote to transfer all frozen ETH to a wallet controlled by Aave LLC:
Hi all,
The court has authorised the on-chain vote to transfer all frozen ETH to a wallet controlled by Aave LLC:
“The transfer process described in the prior paragraph will not be deemed to be a violation of the Restraining Notice. Any party initiating that on-chain transaction, voting with regard to that on-chain transaction, or participating in the on-chain transfer of assets to Aave LLC shall not be in violation of the Restraining Notice” - Court Order
The restraining notice will follow the assets to Aave LLC who have agreed to comply with it as confirmed in the updated proposal.
With this in mind, the Arbitrum Foundation believes the DAO should continue with the governance process.
The on-chain vote for the Constitutional AIP is now available.
The Arbitrum Foundation is aware of recent filings related to the Kim v. Democratic People’s Republic of Korea case, including actions involving third-party protocols.
We are closely monitoring developments, including recent statements and filings made by Aave, and are in active consultation with counsel to assess the situation.
The Arbitrum Foundation is aware of recent filings related to the Kim v. Democratic People’s Republic of Korea case, including actions involving third-party protocols.
We are closely monitoring developments, including recent statements and filings made by Aave, and are in active consultation with counsel to assess the situation.
Given the fluid nature of this matter, we are carefully evaluating potential next steps to ensure any response is measured, appropriate, and aligned with the long-term interests of the Arbitrum community.
We will provide further updates as we get greater clarity.
Yes, I suspect it's for gas, But I'm sure the court won't accept that explanation.
If funds need to be spent to transfer the stolen property, they must be spent by Foundation/DAO. For the DAO, this is a trifle and an operating expense, but doing so will lead to legal problems later.
@cp0x You were correct, my mistake; I deleted my comment to avoid confusion.
It looks like the discrepancy, 0.05 ETH, exists to account for the tx fee (.05 ETH is the tx's gas limit * fee per gas). I think this is necessary because of the unusual way this tx is being created; i.e., a one-off unsigned EOA tx through the inbox.
gm, Voting FOR.
I understand the changes made to the original proposal and support the pragmatic approach: it helps move funds back to affected users while reducing the DAO’s ongoing role in a legally uncertain situation.
gm, Voting FOR.
I understand the changes made to the original proposal and support the pragmatic approach: it helps move funds back to affected users while reducing the DAO’s ongoing role in a legally uncertain situation.
However, affected users and the DeFi ecosystem will greatly benefit (survive?) the sooner funds are returned, and I believe that’s what we as a DAO should prioritize.
Voting FOR.
Releasing these already-frozen exploiter proceeds through the court-authorized Aave LLC transfer path is the most practical way to keep the rsETH recovery moving and reduce ongoing harm to affected users. I do think this process exposed a real gap, and Arbitrum should follow this with a standing policy for handling Security Council-frozen assets in future third-party exploit situations.
Voting FOR this proposal:
Acknowledging the situation is far from ideal, the restraining notice currently in place makes this the most viable path forward, one that offers meaningful protection to delegates and tokenholders. The changes that followed are purely operational in nature and have not altered the spirit of the original proposal in the slightest.
Voting FOR this proposal:
Acknowledging the situation is far from ideal, the restraining notice currently in place makes this the most viable path forward, one that offers meaningful protection to delegates and tokenholders. The changes that followed are purely operational in nature and have not altered the spirit of the original proposal in the slightest.
While the critical path has changed, the reassurances and alternatives presented continue pointing toward the same objective. With our main concerns partially addressed, supporting this proposal allows the process to move forward so that Arbitrum users and other affected parties can begin restoring their positions.
I'm not a lawyer, but I can't imagine this would be an issue. The actual fact (I believe) is that for this transaction type, only funds already in the account can be used for the transaction fee; thus it's impossible for anyone else to spot the cost in the transaction itself. If for whatever legal reason the Foundation/DAO needs to cover the cost of tx fee, that can easily be handled out of band. In dollar terms, we're talking about a hundred dollar discrepancy in a 65 million dollar transfer.
(Regardless, it was a good call-out).
Look carefully: 30,765.667401709008927568 ETH
It's a value from https://arbiscan.io/address/0x0000000000000000000000000000000000000DA0
You sent a different value 30,765.617401709008927568 ETH
They're different, and that's important.
I don't want to vote for an amount that doesn't match what needs to be sent.
thanks! Looks good, voted FOR
How about instead of sending it to AAVE LLC, a much easier entity to control and sue, Arbitrum DAO just puts it into the rsETH bridge , rebacking the lost assets.
I guess it would look something like.
Send ETH to mainnet, buy rsETH, put it back in the bridges on mainnet.
Im not exactly sure the route, but i think the point it clear for kelp to best advise.
DAOplomats voted FOR this proposal on Snapshot.
We support the release of the frozen ETH to support recovery efforts for affected users and protocols. While we acknowledge there are still open questions around legal considerations, transparency, distribution mechanics, and precedent risks, this proposal is currently only a temperature check and not an executable on-chain action.
DAOplomats voted FOR this proposal on Snapshot.
We support the release of the frozen ETH to support recovery efforts for affected users and protocols. While we acknowledge there are still open questions around legal considerations, transparency, distribution mechanics, and precedent risks, this proposal is currently only a temperature check and not an executable on-chain action.
As such, we are comfortable signaling support in principle while expecting further clarity and refinements before any binding vote. We believe supporting coordinated remediation efforts is important for maintaining confidence in the broader Arbitrum and DeFi ecosystem.
Voting FOR at this stage, given the urgency of the situation and the need to progress the coordinated recovery effort.
We also acknowledge and appreciate the publication of the rsETH Backing Technical Implementation Plan, which improves transparency and signals alignment among the involved parties. While several of the community's questions and concerns have been at least partially addressed, there are some important gaps remaining that should not be overlooked.
Voting FOR at this stage, given the urgency of the situation and the need to progress the coordinated recovery effort.
We also acknowledge and appreciate the publication of the rsETH Backing Technical Implementation Plan, which improves transparency and signals alignment among the involved parties. While several of the community's questions and concerns have been at least partially addressed, there are some important gaps remaining that should not be overlooked.
We support releasing the frozen ETH as the most constructive path forward for affected users, for Arbitrum, and for DeFi more broadly. At the same time, delegates have raised legitimate and well-founded concerns, particularly around the ambiguity of the current proposal, the scope of responsibilities, and potential liabilities that have only been partially resolved or remain unaddressed.
Our support for the subsequent onchain vote will be explicitly conditioned on these outstanding issues being fully addressed. In particular, the onchain proposal should include clear and enforceable protections for delegates, such as explicitly adding delegates as indemnified parties, as many other delegates have pointed out.
[u]The following reflects the views of GMX's Governance Committee, and is based on the combined research, evaluation, consensus, and ideation of various committee members.[/u]
GMX's Governance Committee is FOR the release of the frozen ETH into the coordinated rsETH recovery efforts.
[u]The following reflects the views of GMX's Governance Committee, and is based on the combined research, evaluation, consensus, and ideation of various committee members.[/u]
GMX's Governance Committee is FOR the release of the frozen ETH into the coordinated rsETH recovery efforts.
We commend the Arbitrum Security Council for its swift actions in freezing and securing these funds, and in developing a recovery path. The ~30,765.67 ETH is material in contributing toward restoring rsETH's backing.
@AaveLabs could you please clarify if WETH depositors will be protected from any outstanding debts in the scenario where rsETH holders are able to instantly exit/redeem at improved prices? This way Aave ETH suppliers on Arbitrum have more clarity on where they situate in the recovery timeline. The solution should create downstream benefit for Arbitrum's DeFi users.
We are FOR this proposal, and advise there's recognition of AAVE's ETH suppliers resolution as apart of recovery communications.
Can you check the transaction?
I see that the text says 30,765.667501709008927568 ETH will be transferred. In hexadecimal notation, it's 0x683d954c97f692a910.
But the transaction has a different value: 0x683ceb5c7a099c63b50.
The difference is small, but it's not explained anywhere, and it could be a problem if there's any legal action.
Can we get the action contract verified? @offchainlabs https://etherscan.io/address/0x3d456FCd62f5baBCf3263B72fb4ac8fF8cc5a322#code
Voted FOR. Excited to see this moving forward. Big credit to Aave and the DeFi United coalition for pulling the recovery together. Holders can already redeem their rsETH on Arbitrum (and Ethereum, Base, Linea, Mantle) as of yesterday, which is the real proof the coordination worked.
We are voting FOR the Constitutional AIP: Amended Release of Frozen ETH.
The court order issued May 8, 2026 provides the legal clarity we needed to move forward. While I previously raised concerns about delegate indemnification gaps in the original proposal, the amended structure meaningfully reduces governance risk: the restraining order now explicitly permits tokenholders to vote and participate without violating it, and the ETH transfers to Aave LLC where it remains under judicial oversight rather than in an indefinite governance limbo.
Yes, I suspect it's for gas, But I'm sure the court won't accept that explanation.
If funds need to be spent to transfer the stolen property, they must be spent by Foundation/DAO. For the DAO, this is a trifle and an operating expense, but doing so will lead to legal problems later.
@cp0x You were correct, my mistake; I deleted my comment to avoid confusion.
It looks like the discrepancy, 0.05 ETH, exists to account for the tx fee (.05 ETH is the tx's gas limit * fee per gas). I think this is necessary because of the unusual way this tx is being created; i.e., a one-off unsigned EOA tx through the inbox.
gm, Voting FOR.
I understand the changes made to the original proposal and support the pragmatic approach: it helps move funds back to affected users while reducing the DAO’s ongoing role in a legally uncertain situation.
gm, Voting FOR.
I understand the changes made to the original proposal and support the pragmatic approach: it helps move funds back to affected users while reducing the DAO’s ongoing role in a legally uncertain situation.
However, affected users and the DeFi ecosystem will greatly benefit (survive?) the sooner funds are returned, and I believe that’s what we as a DAO should prioritize.
Voting FOR.
Releasing these already-frozen exploiter proceeds through the court-authorized Aave LLC transfer path is the most practical way to keep the rsETH recovery moving and reduce ongoing harm to affected users. I do think this process exposed a real gap, and Arbitrum should follow this with a standing policy for handling Security Council-frozen assets in future third-party exploit situations.
Voting FOR this proposal:
Acknowledging the situation is far from ideal, the restraining notice currently in place makes this the most viable path forward, one that offers meaningful protection to delegates and tokenholders. The changes that followed are purely operational in nature and have not altered the spirit of the original proposal in the slightest.
Voting FOR this proposal:
Acknowledging the situation is far from ideal, the restraining notice currently in place makes this the most viable path forward, one that offers meaningful protection to delegates and tokenholders. The changes that followed are purely operational in nature and have not altered the spirit of the original proposal in the slightest.
While the critical path has changed, the reassurances and alternatives presented continue pointing toward the same objective. With our main concerns partially addressed, supporting this proposal allows the process to move forward so that Arbitrum users and other affected parties can begin restoring their positions.
I'm not a lawyer, but I can't imagine this would be an issue. The actual fact (I believe) is that for this transaction type, only funds already in the account can be used for the transaction fee; thus it's impossible for anyone else to spot the cost in the transaction itself. If for whatever legal reason the Foundation/DAO needs to cover the cost of tx fee, that can easily be handled out of band. In dollar terms, we're talking about a hundred dollar discrepancy in a 65 million dollar transfer.
(Regardless, it was a good call-out).
Look carefully: 30,765.667401709008927568 ETH
It's a value from https://arbiscan.io/address/0x0000000000000000000000000000000000000DA0
You sent a different value 30,765.617401709008927568 ETH
They're different, and that's important.
I don't want to vote for an amount that doesn't match what needs to be sent.
thanks! Looks good, voted FOR
How about instead of sending it to AAVE LLC, a much easier entity to control and sue, Arbitrum DAO just puts it into the rsETH bridge , rebacking the lost assets.
I guess it would look something like.
Send ETH to mainnet, buy rsETH, put it back in the bridges on mainnet.
Im not exactly sure the route, but i think the point it clear for kelp to best advise.
DAOplomats voted FOR this proposal on Snapshot.
We support the release of the frozen ETH to support recovery efforts for affected users and protocols. While we acknowledge there are still open questions around legal considerations, transparency, distribution mechanics, and precedent risks, this proposal is currently only a temperature check and not an executable on-chain action.
DAOplomats voted FOR this proposal on Snapshot.
We support the release of the frozen ETH to support recovery efforts for affected users and protocols. While we acknowledge there are still open questions around legal considerations, transparency, distribution mechanics, and precedent risks, this proposal is currently only a temperature check and not an executable on-chain action.
As such, we are comfortable signaling support in principle while expecting further clarity and refinements before any binding vote. We believe supporting coordinated remediation efforts is important for maintaining confidence in the broader Arbitrum and DeFi ecosystem.
Voting FOR at this stage, given the urgency of the situation and the need to progress the coordinated recovery effort.
We also acknowledge and appreciate the publication of the rsETH Backing Technical Implementation Plan, which improves transparency and signals alignment among the involved parties. While several of the community's questions and concerns have been at least partially addressed, there are some important gaps remaining that should not be overlooked.
Voting FOR at this stage, given the urgency of the situation and the need to progress the coordinated recovery effort.
We also acknowledge and appreciate the publication of the rsETH Backing Technical Implementation Plan, which improves transparency and signals alignment among the involved parties. While several of the community's questions and concerns have been at least partially addressed, there are some important gaps remaining that should not be overlooked.
We support releasing the frozen ETH as the most constructive path forward for affected users, for Arbitrum, and for DeFi more broadly. At the same time, delegates have raised legitimate and well-founded concerns, particularly around the ambiguity of the current proposal, the scope of responsibilities, and potential liabilities that have only been partially resolved or remain unaddressed.
Our support for the subsequent onchain vote will be explicitly conditioned on these outstanding issues being fully addressed. In particular, the onchain proposal should include clear and enforceable protections for delegates, such as explicitly adding delegates as indemnified parties, as many other delegates have pointed out.
[u]The following reflects the views of GMX's Governance Committee, and is based on the combined research, evaluation, consensus, and ideation of various committee members.[/u]
GMX's Governance Committee is FOR the release of the frozen ETH into the coordinated rsETH recovery efforts.
[u]The following reflects the views of GMX's Governance Committee, and is based on the combined research, evaluation, consensus, and ideation of various committee members.[/u]
GMX's Governance Committee is FOR the release of the frozen ETH into the coordinated rsETH recovery efforts.
We commend the Arbitrum Security Council for its swift actions in freezing and securing these funds, and in developing a recovery path. The ~30,765.67 ETH is material in contributing toward restoring rsETH's backing.
@AaveLabs could you please clarify if WETH depositors will be protected from any outstanding debts in the scenario where rsETH holders are able to instantly exit/redeem at improved prices? This way Aave ETH suppliers on Arbitrum have more clarity on where they situate in the recovery timeline. The solution should create downstream benefit for Arbitrum's DeFi users.
We are FOR this proposal, and advise there's recognition of AAVE's ETH suppliers resolution as apart of recovery communications.
Can you check the transaction?
I see that the text says 30,765.667501709008927568 ETH will be transferred. In hexadecimal notation, it's 0x683d954c97f692a910.
But the transaction has a different value: 0x683ceb5c7a099c63b50.
The difference is small, but it's not explained anywhere, and it could be a problem if there's any legal action.
Can we get the action contract verified? @offchainlabs https://etherscan.io/address/0x3d456FCd62f5baBCf3263B72fb4ac8fF8cc5a322#code
Voted FOR. Excited to see this moving forward. Big credit to Aave and the DeFi United coalition for pulling the recovery together. Holders can already redeem their rsETH on Arbitrum (and Ethereum, Base, Linea, Mantle) as of yesterday, which is the real proof the coordination worked.
We are voting FOR the Constitutional AIP: Amended Release of Frozen ETH.
The court order issued May 8, 2026 provides the legal clarity we needed to move forward. While I previously raised concerns about delegate indemnification gaps in the original proposal, the amended structure meaningfully reduces governance risk: the restraining order now explicitly permits tokenholders to vote and participate without violating it, and the ETH transfers to Aave LLC where it remains under judicial oversight rather than in an indefinite governance limbo.
We are voting FOR the Constitutional AIP: Amended Release of Frozen ETH.
The court order issued May 8, 2026 provides the legal clarity we needed to move forward. While I previously raised concerns about delegate indemnification gaps in the original proposal, the amended structure meaningfully reduces governance risk: the restraining order now explicitly permits tokenholders to vote and participate without violating it, and the ETH transfers to Aave LLC where it remains under judicial oversight rather than in an indefinite governance limbo.
Aave LLC has reasonable grounds to contest the restraining order, and this path allows them to do so on a workable timeline while keeping the recovery process moving. Most importantly, this gets the frozen ETH into proper custody for the rsETH recovery effort, which benefits the broader DeFi ecosystem and Arbitrum users affected by the exploit.
We appreciate Aave Labs' legal team for navigating this complex situation and securing a path forward that protects delegates while advancing the recovery effort. Wishing them the best in the ongoing proceedings.
DeFi United
The recipient address will be a 3-of-4 Gnosis Safe with signers from Aave, KelpDAO, EtherFi, and Certora.
The recipient address will be a 3-of-4 Gnosis Safe with signers from Aave, KelpDAO, EtherFi, and Certora.
I understand that there's no answer to the technical question about the address not matching DeFi United (it's more convenient to use a different one with different signers).
But how do you propose voting for a 3/4 multisig address, which, in reality, is currently 2/3, and which contains addresses that can't be linked to the announced parties, since they are either new or haven't been used before.
I'd also like to hear the Foundation's opinion on the restraining notice situation.
Thank you for the proposal!
We have deep respect for Aave, and that's why @AaveLabs, we would appreciate a feedback on our view. We certainly do not know your internal operation, so we (Eureka) can only speak as an external observer. If there were a fully developed technical team with its role being to communicate with the corresponding technical team of each protocol before creating a liquidity pool or any other service, then it would be possible to identify the vulnerabilities that a hacker eventually discovers. Trying to reduce costs, with fewer people/AI agents involved, these gaps are instead found by malicious actors. User safety, and the long-term sustainability of ecosystems, should not be sacrificed in the name of profit maximazation.
Thank you for the proposal!
We have deep respect for Aave, and that's why @AaveLabs, we would appreciate a feedback on our view. We certainly do not know your internal operation, so we (Eureka) can only speak as an external observer. If there were a fully developed technical team with its role being to communicate with the corresponding technical team of each protocol before creating a liquidity pool or any other service, then it would be possible to identify the vulnerabilities that a hacker eventually discovers. Trying to reduce costs, with fewer people/AI agents involved, these gaps are instead found by malicious actors. User safety, and the long-term sustainability of ecosystems, should not be sacrificed in the name of profit maximazation.
Regarding the two components we based our vote:
Therefore, we strongly support the proposal and we are voting FOR.
gm, voting FOR.
The regulatory uncertainty here is the main risk, and as Entropy has noted it will not be clarified in the short term.
However, affected users and the DeFi ecosystem will greatly benefit (survive?) the sooner funds are returned, and I believe that’s what we as a DAO should prioritize.
gm, voting FOR.
The regulatory uncertainty here is the main risk, and as Entropy has noted it will not be clarified in the short term.
However, affected users and the DeFi ecosystem will greatly benefit (survive?) the sooner funds are returned, and I believe that’s what we as a DAO should prioritize.
Still, it would be greatly appreciated before the onchain vote to add better disclosure around DAO delegate indemnification and align it with the AF, Offchain Labs, and the Security Council. It’s unclear to me why this has not been addressed already.
Thanks
Max Lomu
Mr. Gerstein,
With real respect for the judgments your clients hold against the DPRK, two points of pushback on the restraining notice itself:
Mr. Gerstein,
With real respect for the judgments your clients hold against the DPRK, two points of pushback on the restraining notice itself:
The frozen ETH at 0x…0DA0 is not property in which the DPRK has an "interest" under CPLR §5222(b). It's stolen property. Lazarus exploited the rsETH protocol, drained funds belonging to depositors, and held them transiently at an address now under the control of Arbitrum's Security Council. Theft doesn't pass the title. That's elementary property law in New York and most other jurisdictions (cf. UCC §2-403(1): a thief acquires no title and cannot pass title even to a good-faith purchaser). Transient possession through an exploit is not ownership.
The rightful owners are the rsETH depositors whose funds were drained. Their ownership claim didn't extinguish when Lazarus moved the tokens. It followed the assets. DeFi United is not a third party receiving a windfall from the DAO. It's a coordinated mechanism for returning those assets to the original owners.
If "code is law" carries any weight here, it cuts the same way: the exploit was a violation of the protocol's intended function, not an exercise of it. The principle does not vest ownership in the actor who broke the rules.
The Security Council's freeze of these funds was itself a code-level response to an exploit, and it created exactly the window we're in now: the DAO deliberating and directing the assets back to their rightful owner. The exploit was a break with the protocol's intended function. This vote is how the protocol corrects it.
Your clients' losses are real and the DPRK should answer for them. But the remedy the restraining notice asks for, blocking the return of stolen funds to their actual owners shifts the cost of the DPRK's debt onto a different set of victims who were themselves robbed. That compounds the original harm; it doesn't redress it.
Respectfully.
Voting abstain on the temperature check.
We understand the urgency of the recovery effort and want to facilitate any decision the DAO decides, however the legal risk involved based on current information prevents us from directly supporting the proposal.
Our onchain vote will depend on how the legal questions are resolved before submission.
After a careful review of the proposal and the structure of the Security Council action, Entropy Advisors is voting FOR this proposal.
After a careful review of the proposal and the structure of the Security Council action, Entropy Advisors is voting FOR this proposal.
We believe releasing the frozen ETH into the coordinated recovery effort is the right outcome for affected users, for Arbitrum, and for DeFi more broadly. We also believe delegates have legitimate, well-founded concerns about the ambiguity surrounding this vote, and we want to share how we worked through them, because the decision each delegate makes here, including the decision of whether to participate at all, has direct consequences for users currently bearing the cost of the exploit.
The April 18 exploit on the rsETH LayerZero bridge released 116,500 rsETH on Ethereum without a corresponding burn on Unichain. A material portion of that supply was used as collateral on Aave V3 across Ethereum and Arbitrum. The downstream impact is real: impairment in those markets, frozen WETH and rsETH reserves across Aave's Ethereum, Arbitrum, Base, Mantle, and Linea deployments, and innocent users with positions they cannot close.
On April 21, the Arbitrum Security Council executed an emergency action freezing 30,765.67 ETH of exploiter funds on Arbitrum One. The proposal before us asks Arbitrum DAO to release those funds to a 2-of-3 Gnosis Safe with signers from Aave, KelpDAO, and Certora, scoped solely to the recovery effort.
There is uncertainty regarding how this all plays out. A vote of this size and scale has never happened before and comes with potential risks for delegates. We take that ambiguity seriously, and we don't think delegates weighing it carefully are wrong to do so.
At the same time, there is a real cost to delay. Users on Aave with stuck borrow positions are accruing interest they cannot escape. Reserves remain frozen across multiple markets. Each day this drags, more of the cost of the exploit gets transferred onto users who had nothing to do with it. Holding out for full regulatory clarity, which is unlikely to arrive on any near-term timeline, is itself a choice with consequences.
We'd also like to flag a procedural point that may not be obvious to all readers. Under Arbitrum governance, abstain votes count toward quorum. A delegate who wishes to fully sit out this proposal must not cast a vote at all, which is a statement in itself. We mention this because the question of "whether to participate" is meaningfully different from the question of "how to vote," and we think it deserves to be discussed openly rather than being left unclear.
A few specific points where we think the proposal is well-constructed:
This vote will be remembered, not because of its size, but because of what it asks delegates to do: weigh real ambiguity against real harm to real users, and engage anyway.
We'd encourage other delegates to engage with the substance, share their reasoning publicly on this thread, and vote. Whether that vote is FOR, AGAINST, or ABSTAIN, a clear, early collective signal matters here. Quorum matters. And the users currently bearing the cost of the exploit deserve to see governance treat their situation with the urgency it warrants.
Entropy Advisors is voting FOR.
Generally very much in favor of this proposal given its importance to the DeFi ecosystem, and happy to speed it up, but as others have noted there is an asymmetry to the indemnification clause:
I appreciate that the CIP provides baseline coverage for delegate governance activities, and that Items 1--10 layer on top of pre-existing corporate protections for the other Indemnified Parties. The remaining concern is structural rather than categorical: the AIP-specific indemnification operates as a primary, insurance-independent upgrade for parties with pre-existing corporate D&O, while operating only as a back-end reimbursement to the Foundation for amounts the CIP actually pays to delegates. This means delegate protection is fully bounded by CIP coverage (retention, $10M aggregate, exclusions, claim handling discretion) with no fallback if CIP doesn't pay. It would appreciated if Item 11 be expanded to provide direct indemnification to delegates in cases where CIP coverage is denied, capped, or exhausted --- bringing delegate protection into structural parity with the insurance-independent posture other Indemnified Parties enjoy under Item 9.
We are voting FOR the Constitutional AIP: Amended Release of Frozen ETH.
The court order issued May 8, 2026 provides the legal clarity we needed to move forward. While I previously raised concerns about delegate indemnification gaps in the original proposal, the amended structure meaningfully reduces governance risk: the restraining order now explicitly permits tokenholders to vote and participate without violating it, and the ETH transfers to Aave LLC where it remains under judicial oversight rather than in an indefinite governance limbo.
Aave LLC has reasonable grounds to contest the restraining order, and this path allows them to do so on a workable timeline while keeping the recovery process moving. Most importantly, this gets the frozen ETH into proper custody for the rsETH recovery effort, which benefits the broader DeFi ecosystem and Arbitrum users affected by the exploit.
We appreciate Aave Labs' legal team for navigating this complex situation and securing a path forward that protects delegates while advancing the recovery effort. Wishing them the best in the ongoing proceedings.
DeFi United
The recipient address will be a 3-of-4 Gnosis Safe with signers from Aave, KelpDAO, EtherFi, and Certora.
The recipient address will be a 3-of-4 Gnosis Safe with signers from Aave, KelpDAO, EtherFi, and Certora.
I understand that there's no answer to the technical question about the address not matching DeFi United (it's more convenient to use a different one with different signers).
But how do you propose voting for a 3/4 multisig address, which, in reality, is currently 2/3, and which contains addresses that can't be linked to the announced parties, since they are either new or haven't been used before.
I'd also like to hear the Foundation's opinion on the restraining notice situation.
Thank you for the proposal!
We have deep respect for Aave, and that's why @AaveLabs, we would appreciate a feedback on our view. We certainly do not know your internal operation, so we (Eureka) can only speak as an external observer. If there were a fully developed technical team with its role being to communicate with the corresponding technical team of each protocol before creating a liquidity pool or any other service, then it would be possible to identify the vulnerabilities that a hacker eventually discovers. Trying to reduce costs, with fewer people/AI agents involved, these gaps are instead found by malicious actors. User safety, and the long-term sustainability of ecosystems, should not be sacrificed in the name of profit maximazation.
Thank you for the proposal!
We have deep respect for Aave, and that's why @AaveLabs, we would appreciate a feedback on our view. We certainly do not know your internal operation, so we (Eureka) can only speak as an external observer. If there were a fully developed technical team with its role being to communicate with the corresponding technical team of each protocol before creating a liquidity pool or any other service, then it would be possible to identify the vulnerabilities that a hacker eventually discovers. Trying to reduce costs, with fewer people/AI agents involved, these gaps are instead found by malicious actors. User safety, and the long-term sustainability of ecosystems, should not be sacrificed in the name of profit maximazation.
Regarding the two components we based our vote:
Therefore, we strongly support the proposal and we are voting FOR.
gm, voting FOR.
The regulatory uncertainty here is the main risk, and as Entropy has noted it will not be clarified in the short term.
However, affected users and the DeFi ecosystem will greatly benefit (survive?) the sooner funds are returned, and I believe that’s what we as a DAO should prioritize.
gm, voting FOR.
The regulatory uncertainty here is the main risk, and as Entropy has noted it will not be clarified in the short term.
However, affected users and the DeFi ecosystem will greatly benefit (survive?) the sooner funds are returned, and I believe that’s what we as a DAO should prioritize.
Still, it would be greatly appreciated before the onchain vote to add better disclosure around DAO delegate indemnification and align it with the AF, Offchain Labs, and the Security Council. It’s unclear to me why this has not been addressed already.
Thanks
Max Lomu
Mr. Gerstein,
With real respect for the judgments your clients hold against the DPRK, two points of pushback on the restraining notice itself:
Mr. Gerstein,
With real respect for the judgments your clients hold against the DPRK, two points of pushback on the restraining notice itself:
The frozen ETH at 0x…0DA0 is not property in which the DPRK has an "interest" under CPLR §5222(b). It's stolen property. Lazarus exploited the rsETH protocol, drained funds belonging to depositors, and held them transiently at an address now under the control of Arbitrum's Security Council. Theft doesn't pass the title. That's elementary property law in New York and most other jurisdictions (cf. UCC §2-403(1): a thief acquires no title and cannot pass title even to a good-faith purchaser). Transient possession through an exploit is not ownership.
The rightful owners are the rsETH depositors whose funds were drained. Their ownership claim didn't extinguish when Lazarus moved the tokens. It followed the assets. DeFi United is not a third party receiving a windfall from the DAO. It's a coordinated mechanism for returning those assets to the original owners.
If "code is law" carries any weight here, it cuts the same way: the exploit was a violation of the protocol's intended function, not an exercise of it. The principle does not vest ownership in the actor who broke the rules.
The Security Council's freeze of these funds was itself a code-level response to an exploit, and it created exactly the window we're in now: the DAO deliberating and directing the assets back to their rightful owner. The exploit was a break with the protocol's intended function. This vote is how the protocol corrects it.
Your clients' losses are real and the DPRK should answer for them. But the remedy the restraining notice asks for, blocking the return of stolen funds to their actual owners shifts the cost of the DPRK's debt onto a different set of victims who were themselves robbed. That compounds the original harm; it doesn't redress it.
Respectfully.
Voting abstain on the temperature check.
We understand the urgency of the recovery effort and want to facilitate any decision the DAO decides, however the legal risk involved based on current information prevents us from directly supporting the proposal.
Our onchain vote will depend on how the legal questions are resolved before submission.
After a careful review of the proposal and the structure of the Security Council action, Entropy Advisors is voting FOR this proposal.
After a careful review of the proposal and the structure of the Security Council action, Entropy Advisors is voting FOR this proposal.
We believe releasing the frozen ETH into the coordinated recovery effort is the right outcome for affected users, for Arbitrum, and for DeFi more broadly. We also believe delegates have legitimate, well-founded concerns about the ambiguity surrounding this vote, and we want to share how we worked through them, because the decision each delegate makes here, including the decision of whether to participate at all, has direct consequences for users currently bearing the cost of the exploit.
The April 18 exploit on the rsETH LayerZero bridge released 116,500 rsETH on Ethereum without a corresponding burn on Unichain. A material portion of that supply was used as collateral on Aave V3 across Ethereum and Arbitrum. The downstream impact is real: impairment in those markets, frozen WETH and rsETH reserves across Aave's Ethereum, Arbitrum, Base, Mantle, and Linea deployments, and innocent users with positions they cannot close.
On April 21, the Arbitrum Security Council executed an emergency action freezing 30,765.67 ETH of exploiter funds on Arbitrum One. The proposal before us asks Arbitrum DAO to release those funds to a 2-of-3 Gnosis Safe with signers from Aave, KelpDAO, and Certora, scoped solely to the recovery effort.
There is uncertainty regarding how this all plays out. A vote of this size and scale has never happened before and comes with potential risks for delegates. We take that ambiguity seriously, and we don't think delegates weighing it carefully are wrong to do so.
At the same time, there is a real cost to delay. Users on Aave with stuck borrow positions are accruing interest they cannot escape. Reserves remain frozen across multiple markets. Each day this drags, more of the cost of the exploit gets transferred onto users who had nothing to do with it. Holding out for full regulatory clarity, which is unlikely to arrive on any near-term timeline, is itself a choice with consequences.
We'd also like to flag a procedural point that may not be obvious to all readers. Under Arbitrum governance, abstain votes count toward quorum. A delegate who wishes to fully sit out this proposal must not cast a vote at all, which is a statement in itself. We mention this because the question of "whether to participate" is meaningfully different from the question of "how to vote," and we think it deserves to be discussed openly rather than being left unclear.
A few specific points where we think the proposal is well-constructed:
This vote will be remembered, not because of its size, but because of what it asks delegates to do: weigh real ambiguity against real harm to real users, and engage anyway.
We'd encourage other delegates to engage with the substance, share their reasoning publicly on this thread, and vote. Whether that vote is FOR, AGAINST, or ABSTAIN, a clear, early collective signal matters here. Quorum matters. And the users currently bearing the cost of the exploit deserve to see governance treat their situation with the urgency it warrants.
Entropy Advisors is voting FOR.
Generally very much in favor of this proposal given its importance to the DeFi ecosystem, and happy to speed it up, but as others have noted there is an asymmetry to the indemnification clause:
I appreciate that the CIP provides baseline coverage for delegate governance activities, and that Items 1--10 layer on top of pre-existing corporate protections for the other Indemnified Parties. The remaining concern is structural rather than categorical: the AIP-specific indemnification operates as a primary, insurance-independent upgrade for parties with pre-existing corporate D&O, while operating only as a back-end reimbursement to the Foundation for amounts the CIP actually pays to delegates. This means delegate protection is fully bounded by CIP coverage (retention, $10M aggregate, exclusions, claim handling discretion) with no fallback if CIP doesn't pay. It would appreciated if Item 11 be expanded to provide direct indemnification to delegates in cases where CIP coverage is denied, capped, or exhausted --- bringing delegate protection into structural parity with the insurance-independent posture other Indemnified Parties enjoy under Item 9.
I agree that I'd be opposed to #2, security council action.
Maybe a long-shot, but in the essence of moving fast, I wonder if there's a well-capitalized actor that would be willing to give Aave a loan backed by the ETH held by the DAO?
Not super happy with the 49 day timeline… I would like to see it sped up some how, but for a temp check, I am overall very supportive.
Not super happy with the 49 day timeline… I would like to see it sped up some how, but for a temp check, I am overall very supportive.
Shortening the forum discussion and/or temperature check phases (phases 2 and 3) still leaves a minimum of 35 days; the on-chain proposal itself has no technical way of bypassing that.
Thus, AFAICT, there are essentially three possible ways to speed up the process further:
Go forward with the on-chain proposal and in parallel find a large ETH holder to temporarily loan Defi United the ETH (to be paid back with the frozen ETH when it unlocks).
Another Security Council Emergency action.
A Security Council non-emergency action (minimum 18 days after action is initiated before funds are unfrozen).
I would personally be very strongly opposed to 2, as it would seem to me to violate the constitution (I don't think the speed of the fund recovery can be classified as a security emergency) and IMO would set a very bad precedent.
I'm currently also opposed to 3 but would be more open to the discussion, though I would note that it's not clear much time would be gained here, since presumably some sort of on-chain vote would still take place prior to the action (time gained would be 17 days minus the decided voting period.) I'd also note that this would still seem to me to be out of line with the constitution, which specifies this power should only be used for "routine software upgrades, routine maintenance and other parameter adjustments."
1 would seem to be ideal if possible. It does of course require finding a lender, tho given the number of parties who have already been willing to not merely lend but donate ETH into this effort, it certainly doesn't seem impossible.
(Note that I'm speaking only as a delegate and from my knowledge of Arbitrum's governance system; I am unaware of any consideration or discussion of any of the above three possibilities that's already taken place.)
Not super happy with the 49 day timeline... I would like to see it sped up some how, but for a temp check, I am overall very supportive.
Again I am speaking as a delegate, not as a Security Council member.
Thanks @AaveLabs for the proposal and the update, and more generally for taking initiative in this situation. I am in support of the proposal to release the frozen funds to Defi United's effort without any waterfall distribution conditions.
Much is unusual and unprecedented about this situation, including the wide range of the affected parties and the fact that Security Council took action in an exploit unrelated to any vulnerability in the Arbitrum Protocol itself. It isn't self-evident to me that the affected parties on Arbitrum should be given priority to funds that the Security Council was able to freeze in an industry-wide recovery process like this, and I don't see anything in the Arbitrum DAO Constitution indicating that such a policy should necessarily be the one followed. In the already remarkable recovery effort that AAVE has been leading, we've seen many parties step forward and donate large sums of ETH to help make users whole, and they (as far as I know) have done so without any conditions of prioritizing specific users. Many of the biggest donors are projects and individuals who weren't at all responsible for the exploit and who aren't directly affected by it. Given that, and adding to that the fact that's what's being considered here isn't a donation of any funds from the Arbitrum DAO's reserves, but rather recovery of a pool of entirely stolen funds, I think it would be most fitting and appropriate for the DAO to follow suit in this collective effort.
Thanks @AaveLabs for the proposal and the update, and more generally for taking initiative in this situation. I am in support of the proposal to release the frozen funds to Defi United's effort without any waterfall distribution conditions.
Much is unusual and unprecedented about this situation, including the wide range of the affected parties and the fact that Security Council took action in an exploit unrelated to any vulnerability in the Arbitrum Protocol itself. It isn't self-evident to me that the affected parties on Arbitrum should be given priority to funds that the Security Council was able to freeze in an industry-wide recovery process like this, and I don't see anything in the Arbitrum DAO Constitution indicating that such a policy should necessarily be the one followed. In the already remarkable recovery effort that AAVE has been leading, we've seen many parties step forward and donate large sums of ETH to help make users whole, and they (as far as I know) have done so without any conditions of prioritizing specific users. Many of the biggest donors are projects and individuals who weren't at all responsible for the exploit and who aren't directly affected by it. Given that, and adding to that the fact that's what's being considered here isn't a donation of any funds from the Arbitrum DAO's reserves, but rather recovery of a pool of entirely stolen funds, I think it would be most fitting and appropriate for the DAO to follow suit in this collective effort.
In their post, @AaveLabs seems confident that they will likely be able to restore rsETH to its full backing, in which case discussion about the distribution would be (happily) moot anyway. That said, while I'm glad to see AAVE's optimism, I think it would be helpful to have some more concrete details about the risks of falling short. The language in the update seems to suggest that so long as the public proposals like this one pass, and barring and operational errors, full restoration is likely. An updated breakdown of the numbers as they stand, and the specific scenarios that would lead to losses (and their estimated likelihood etc.) would probably help other delegates gain confidence in this decision (though given the urgency to move things along, I encourage delegates not to wait for further updates before participating in the discussion). My hope is that given the uptick in contributions to Defi United even in the past few days, the update will be a positive one.
As for expediting the process by, say, shortening or skipping the snapshot phase for this proposal, I would support this, though this would only really make sense when/if more delegates publicly weigh in. (There are other means of expediting the process that I imagine may be under consideration, but I suggest holding off on that discussion for now for the sake of keeping this thread focused).
Hi, 'd like to reiterate my thoughts on the need to avoid bureaucracy in this urgent situation and move straight to on-chain voting on Thursday.
Following Lido's example, which allocates funds from its treasury, their vote began last week and ends today.
Hi, 'd like to reiterate my thoughts on the need to avoid bureaucracy in this urgent situation and move straight to on-chain voting on Thursday.
Following Lido's example, which allocates funds from its treasury, their vote began last week and ends today.
Also, I have a question about address 0xf228130ce4fAB082C7D5522c90833cec83A9C15e, as I had previously received information that the address was different, namely
https://etherscan.io/address/0x0fCa5194baA59a362a835031d9C4A25970effE68
One thing i feel is missing from this post is if the procedure is waiting purely for this release
One thing i feel is missing from this post is if the procedure is waiting purely for this release
ARB is contributing the largest amount back, mind you its not a donation, rather a recovery, but i still think the largest amount should be sent last. or at least with clear indication that there will not be more waiting there.
Im am personally affected here, and TBClear, want this done as fast as possible.
Thanks for putting this together. Returning stolen property to its rightful owners is the right move.
+1 to everything Griff and 0xDonPepe raised. Arbitrum-side claimants need to be sized clearly inside the waterfall, the math needs to be public before the on-chain vote, and delegates should be added as Indemnified Parties.
Thanks for putting this together. Returning stolen property to its rightful owners is the right move.
+1 to everything Griff and 0xDonPepe raised. Arbitrum-side claimants need to be sized clearly inside the waterfall, the math needs to be public before the on-chain vote, and delegates should be added as Indemnified Parties.
As delegates we need to understand what we're voting on. Collaboration will bring the best possible outcome for everyone, Arbitrum included. But to vote on this in good faith, we need clarity on how Arbitrum users get affected and what KelpDAO is putting in from their treasury alongside the seized ETH.
As Nicksta pointed, 49 days is a long window for the people on the wrong side of those Aave positions. If the disbursement plan can get finalized in parallel with the temperature check rather than after, we save material time without cutting safety steps.
Thanks to the authors for putting this together. Routing the 30,765.67 ETH into the coordinated recovery effort is the right destination in principle; leaving the funds frozen indefinitely helps no one. That said, before this moves to Snapshot, two conditions should be made explicit in the final spec:
1. Arbitrum users must be made whole, with no haircut and no pro-rata socialization with non-Arbitrum claimants on these specific funds.
As a member of the Security Council and as a delegate, I want to be clear that I am speaking here only in my role as a delegate. My role as a Security Council member in this matter is complete.
I agree with @Nicksta & strongly support expediting this process. We should move to a Snapshot vote as soon as possible to validate the community’s intent and avoid unnecessary delays in unlocking these funds.
As a member of the Security Council and as a delegate, I want to be clear that I am speaking here only in my role as a delegate. My role as a Security Council member in this matter is complete.
I agree with @Nicksta & strongly support expediting this process. We should move to a Snapshot vote as soon as possible to validate the community’s intent and avoid unnecessary delays in unlocking these funds.
That said, before progressing to the on-chain vote, there are still critical open questions that need clear answers:
These funds were secured on Arbitrum, and it’s important to understand how the outcomes will impact users within the Arbitrum ecosystem specifically. Clarity here is essential for informed governance.
Before any on-chain execution, the DAO should clearly communicate:
I’m supportive of moving quickly, but we need transparency around outcomes before the final transaction so delegates and the broader community can make a well-informed decision.
I agree that I'd be opposed to #2, security council action.
Maybe a long-shot, but in the essence of moving fast, I wonder if there's a well-capitalized actor that would be willing to give Aave a loan backed by the ETH held by the DAO?
Not super happy with the 49 day timeline… I would like to see it sped up some how, but for a temp check, I am overall very supportive.
Not super happy with the 49 day timeline… I would like to see it sped up some how, but for a temp check, I am overall very supportive.
Shortening the forum discussion and/or temperature check phases (phases 2 and 3) still leaves a minimum of 35 days; the on-chain proposal itself has no technical way of bypassing that.
Thus, AFAICT, there are essentially three possible ways to speed up the process further:
Go forward with the on-chain proposal and in parallel find a large ETH holder to temporarily loan Defi United the ETH (to be paid back with the frozen ETH when it unlocks).
Another Security Council Emergency action.
A Security Council non-emergency action (minimum 18 days after action is initiated before funds are unfrozen).
I would personally be very strongly opposed to 2, as it would seem to me to violate the constitution (I don't think the speed of the fund recovery can be classified as a security emergency) and IMO would set a very bad precedent.
I'm currently also opposed to 3 but would be more open to the discussion, though I would note that it's not clear much time would be gained here, since presumably some sort of on-chain vote would still take place prior to the action (time gained would be 17 days minus the decided voting period.) I'd also note that this would still seem to me to be out of line with the constitution, which specifies this power should only be used for "routine software upgrades, routine maintenance and other parameter adjustments."
1 would seem to be ideal if possible. It does of course require finding a lender, tho given the number of parties who have already been willing to not merely lend but donate ETH into this effort, it certainly doesn't seem impossible.
(Note that I'm speaking only as a delegate and from my knowledge of Arbitrum's governance system; I am unaware of any consideration or discussion of any of the above three possibilities that's already taken place.)
Not super happy with the 49 day timeline... I would like to see it sped up some how, but for a temp check, I am overall very supportive.
Again I am speaking as a delegate, not as a Security Council member.
Thanks @AaveLabs for the proposal and the update, and more generally for taking initiative in this situation. I am in support of the proposal to release the frozen funds to Defi United's effort without any waterfall distribution conditions.
Much is unusual and unprecedented about this situation, including the wide range of the affected parties and the fact that Security Council took action in an exploit unrelated to any vulnerability in the Arbitrum Protocol itself. It isn't self-evident to me that the affected parties on Arbitrum should be given priority to funds that the Security Council was able to freeze in an industry-wide recovery process like this, and I don't see anything in the Arbitrum DAO Constitution indicating that such a policy should necessarily be the one followed. In the already remarkable recovery effort that AAVE has been leading, we've seen many parties step forward and donate large sums of ETH to help make users whole, and they (as far as I know) have done so without any conditions of prioritizing specific users. Many of the biggest donors are projects and individuals who weren't at all responsible for the exploit and who aren't directly affected by it. Given that, and adding to that the fact that's what's being considered here isn't a donation of any funds from the Arbitrum DAO's reserves, but rather recovery of a pool of entirely stolen funds, I think it would be most fitting and appropriate for the DAO to follow suit in this collective effort.
Thanks @AaveLabs for the proposal and the update, and more generally for taking initiative in this situation. I am in support of the proposal to release the frozen funds to Defi United's effort without any waterfall distribution conditions.
Much is unusual and unprecedented about this situation, including the wide range of the affected parties and the fact that Security Council took action in an exploit unrelated to any vulnerability in the Arbitrum Protocol itself. It isn't self-evident to me that the affected parties on Arbitrum should be given priority to funds that the Security Council was able to freeze in an industry-wide recovery process like this, and I don't see anything in the Arbitrum DAO Constitution indicating that such a policy should necessarily be the one followed. In the already remarkable recovery effort that AAVE has been leading, we've seen many parties step forward and donate large sums of ETH to help make users whole, and they (as far as I know) have done so without any conditions of prioritizing specific users. Many of the biggest donors are projects and individuals who weren't at all responsible for the exploit and who aren't directly affected by it. Given that, and adding to that the fact that's what's being considered here isn't a donation of any funds from the Arbitrum DAO's reserves, but rather recovery of a pool of entirely stolen funds, I think it would be most fitting and appropriate for the DAO to follow suit in this collective effort.
In their post, @AaveLabs seems confident that they will likely be able to restore rsETH to its full backing, in which case discussion about the distribution would be (happily) moot anyway. That said, while I'm glad to see AAVE's optimism, I think it would be helpful to have some more concrete details about the risks of falling short. The language in the update seems to suggest that so long as the public proposals like this one pass, and barring and operational errors, full restoration is likely. An updated breakdown of the numbers as they stand, and the specific scenarios that would lead to losses (and their estimated likelihood etc.) would probably help other delegates gain confidence in this decision (though given the urgency to move things along, I encourage delegates not to wait for further updates before participating in the discussion). My hope is that given the uptick in contributions to Defi United even in the past few days, the update will be a positive one.
As for expediting the process by, say, shortening or skipping the snapshot phase for this proposal, I would support this, though this would only really make sense when/if more delegates publicly weigh in. (There are other means of expediting the process that I imagine may be under consideration, but I suggest holding off on that discussion for now for the sake of keeping this thread focused).
Hi, 'd like to reiterate my thoughts on the need to avoid bureaucracy in this urgent situation and move straight to on-chain voting on Thursday.
Following Lido's example, which allocates funds from its treasury, their vote began last week and ends today.
Hi, 'd like to reiterate my thoughts on the need to avoid bureaucracy in this urgent situation and move straight to on-chain voting on Thursday.
Following Lido's example, which allocates funds from its treasury, their vote began last week and ends today.
Also, I have a question about address 0xf228130ce4fAB082C7D5522c90833cec83A9C15e, as I had previously received information that the address was different, namely
https://etherscan.io/address/0x0fCa5194baA59a362a835031d9C4A25970effE68
One thing i feel is missing from this post is if the procedure is waiting purely for this release
One thing i feel is missing from this post is if the procedure is waiting purely for this release
ARB is contributing the largest amount back, mind you its not a donation, rather a recovery, but i still think the largest amount should be sent last. or at least with clear indication that there will not be more waiting there.
Im am personally affected here, and TBClear, want this done as fast as possible.
Thanks for putting this together. Returning stolen property to its rightful owners is the right move.
+1 to everything Griff and 0xDonPepe raised. Arbitrum-side claimants need to be sized clearly inside the waterfall, the math needs to be public before the on-chain vote, and delegates should be added as Indemnified Parties.
Thanks for putting this together. Returning stolen property to its rightful owners is the right move.
+1 to everything Griff and 0xDonPepe raised. Arbitrum-side claimants need to be sized clearly inside the waterfall, the math needs to be public before the on-chain vote, and delegates should be added as Indemnified Parties.
As delegates we need to understand what we're voting on. Collaboration will bring the best possible outcome for everyone, Arbitrum included. But to vote on this in good faith, we need clarity on how Arbitrum users get affected and what KelpDAO is putting in from their treasury alongside the seized ETH.
As Nicksta pointed, 49 days is a long window for the people on the wrong side of those Aave positions. If the disbursement plan can get finalized in parallel with the temperature check rather than after, we save material time without cutting safety steps.
Thanks to the authors for putting this together. Routing the 30,765.67 ETH into the coordinated recovery effort is the right destination in principle; leaving the funds frozen indefinitely helps no one. That said, before this moves to Snapshot, two conditions should be made explicit in the final spec:
1. Arbitrum users must be made whole, with no haircut and no pro-rata socialization with non-Arbitrum claimants on these specific funds.
As a member of the Security Council and as a delegate, I want to be clear that I am speaking here only in my role as a delegate. My role as a Security Council member in this matter is complete.
I agree with @Nicksta & strongly support expediting this process. We should move to a Snapshot vote as soon as possible to validate the community’s intent and avoid unnecessary delays in unlocking these funds.
As a member of the Security Council and as a delegate, I want to be clear that I am speaking here only in my role as a delegate. My role as a Security Council member in this matter is complete.
I agree with @Nicksta & strongly support expediting this process. We should move to a Snapshot vote as soon as possible to validate the community’s intent and avoid unnecessary delays in unlocking these funds.
That said, before progressing to the on-chain vote, there are still critical open questions that need clear answers:
These funds were secured on Arbitrum, and it’s important to understand how the outcomes will impact users within the Arbitrum ecosystem specifically. Clarity here is essential for informed governance.
Before any on-chain execution, the DAO should clearly communicate:
I’m supportive of moving quickly, but we need transparency around outcomes before the final transaction so delegates and the broader community can make a well-informed decision.
Thanks to the authors for putting this together. Routing the 30,765.67 ETH into the coordinated recovery effort is the right destination in principle; leaving the funds frozen indefinitely helps no one. That said, before this moves to Snapshot, two conditions should be made explicit in the final spec:
1. Arbitrum users must be made whole, with no haircut and no pro-rata socialization with non-Arbitrum claimants on these specific funds.
2. Delegates voting on this proposal must be properly protected, not just nominally referenced.
My reasoning on the no-haircut condition:
On delegate indemnification, item (11) is not enough.
DAO delegates are not named Indemnified Parties anywhere in the clause. The defined set is the Arbitrum Foundation, Offchain Labs, the Security Council and its members, and their officers, directors, agents, employees, advisors, contractors, representatives, and successors. Delegates appear only in item (11), and only indirectly: Aave Labs reimburses the Foundation if the Captive Insurance Product pays out to a delegate, treating that delegate "as if" they were an Indemnified Party for the limited purpose of that reimbursement.
That structure has real gaps:
For a Constitutional AIP touching frozen funds linked to a major exploit (exactly the kind of vote most likely to attract litigation or regulatory inquiry) this is the wrong threshold of protection. Delegates should not have to weigh personal legal exposure against governance participation on a vote the authors themselves benefit from.
Concrete asks before onchain submission:
Thanks to the authors for putting this together. Routing the 30,765.67 ETH into the coordinated recovery effort is the right destination in principle; leaving the funds frozen indefinitely helps no one. That said, before this moves to Snapshot, two conditions should be made explicit in the final spec:
1. Arbitrum users must be made whole, with no haircut and no pro-rata socialization with non-Arbitrum claimants on these specific funds.
2. Delegates voting on this proposal must be properly protected, not just nominally referenced.
My reasoning on the no-haircut condition:
On delegate indemnification, item (11) is not enough.
DAO delegates are not named Indemnified Parties anywhere in the clause. The defined set is the Arbitrum Foundation, Offchain Labs, the Security Council and its members, and their officers, directors, agents, employees, advisors, contractors, representatives, and successors. Delegates appear only in item (11), and only indirectly: Aave Labs reimburses the Foundation if the Captive Insurance Product pays out to a delegate, treating that delegate "as if" they were an Indemnified Party for the limited purpose of that reimbursement.
That structure has real gaps:
For a Constitutional AIP touching frozen funds linked to a major exploit (exactly the kind of vote most likely to attract litigation or regulatory inquiry) this is the wrong threshold of protection. Delegates should not have to weigh personal legal exposure against governance participation on a vote the authors themselves benefit from.
Concrete asks before onchain submission:
