Solana Foundation Chair Lily Liu said the foundation has lent USDT to Aave to support recovery efforts after the April 18 exploit. The liquidity came from the foundation’s treasury, according to Liu, and is meant to help steady DeFi conditions while broader recovery work continues. The size of the loan and its terms were not disclosed.
Liu said the Solana Foundation has a long history of deploying capital in Solana DeFi, but framed this move as a response to shared risk across crypto markets rather than a single-chain issue. She also said the foundation had backed Tether’s recovery plan for Drift before this step, and confirmed plans to bring AAVE to the Solana network this weekend.
How unbacked rsETH created exposure on Aave
The exploit was tied to KelpDAO infrastructure. Attackers used a misconfiguration in LayerZero’s verification system to mint rsETH tokens that had no backing, then posted those tokens to Aave as collateral. Aave functioned as designed, but the collateral itself was invalid, leaving the protocol exposed once real assets were withdrawn against it.
That sequence allowed withdrawals of nearly $190 million in real assets. Current estimates put potential bad debt at around $124 million if losses are spread across participants. In a more severe scenario, total losses could top $230 million, depending on how recovery mechanisms assign liabilities to affected users.
Recovery funding grows as DAOs line up pledges
DeFi participants have since organized a joint recovery effort. More than $230 million has been raised through DeFi United to compensate affected rsETH holders. Arbitrum DAO, Mantle, and Aave DAO have also pledged more than 85,000 ETH, though those commitments still need governance approval.
Aave founder Stani Kulechov separately committed 5,000 ETH on a personal basis. Against that backdrop, the Solana Foundation’s USDT loan adds short-term liquidity support while compensation and governance processes move ahead. The key unresolved issues remain the final size of the bad debt, the structure of user compensation, and the timeline for approvals.