Mantle Tokenholders Back Aave Credit Facility After rsETH Exploit

Mantle tokenholders have approved a proposal (MIP-34) authorizing a credit facility of up to 30,000 Ether (ETH), valued at approximately $68 million, for Aave DAO. This move aims to help Aave address bad debt resulting from the April rsETH exploit on Aave V3. The exploit involved an attacker depositing unbacked rsETH and borrowing significant amounts of WETH, wstETH, and stablecoins, potentially creating bad debt estimated between $123.7 million and $230.1 million. The Mantle Foundation will negotiate definitive agreements with Aave DAO for the loan from the Mantle Treasury, contingent on Aave implementing its recovery plan and finalizing terms. The exploit also caused liquidity stress in Aave's Wrapped Ether (WETH) market, leading to prolonged high utilization rates. While the market has since cooled, the credit facility is intended to provide a backstop as Aave works to restore confidence in its lending markets.

(Source：Cointelegraph)