Aave Restores Ethereum-Backed Loans Across Six Networks

Aave reinstates wETH collateral in six networks post-Kelp hack.

The lending protocol Aave has reinstated collateral parameters for wETH across six networks. This marks the next phase in the plan to address the aftermath of the April Kelp hack.

The next step in the rsETH technical recovery plan has been completed with the restoration of WETH LTVs to their pre-incident levels across all affected networks. Users can now once again borrow against WETH on Aave, including through collateral and debt swaps. https://t.co/6BzxUtu3Ci

— Stani (@StaniKulechov) May 17, 2026

Developers have restored the loan-to-value ratio to previous levels in the Ethereum (Core and Prime) networks, Arbitrum, Base, Mantle, and Linea. Users can once again borrow against wETH and utilize collateral and debt swap functions.

Restrictions were imposed after attackers exploited a vulnerability in Kelp’s rsETH bridge. The hackers managed to mint unsecured tokens worth $292 million and withdrew about $230 million in ETH from Aave pools. As an emergency measure, the protocol set the LTV for wETH to zero, effectively banning its use as collateral.

According to governance documents, the LTV ratios have returned to the following levels:

• Ethereum Core — 80.5%;
• Ethereum Prime — 84%;
• Arbitrum, Base, and Linea — 80%;
• Mantle — 80.5%.

The team reports that of the 112,103 rsETH created during the attack, nearly 107,000 coins have been recovered through liquidations in Aave and Compound. The remaining deficit of 5,200 rsETH is expected to be covered by the industry coalition DeFi United.

Aave’s founder, Stani Kulechov, described the update as a significant step towards the technical recovery of the system. wETH is a key asset in decentralized finance. Lifting the restrictions should restore liquidity and give users access to leverage strategies.

In May, Aave liquidated the remaining positions of the Kelp hacker in rsETH as part of the approved recovery plan.

Later, representatives from Kelp and Aave announced their intention to return 117,132 rsETH within two weeks.