coindesk.com
Lending protocol Aave has restored wrapped ether (WETH) loan-to-value (LTV) ratios across six major networks, reversing emergency restrictions imposed after April exploit that caused over $230 million in tokens to be stolen.
In accordance with the rsETH technical recovery plan, WETH LTVs on Aave V3 Ethereum Core, Ethereum Prime, Arbitrum, Base, Mantle, and Linea have been restored to their pre-incident values.
— Aave (@aave) May 17, 2026
WETH now operates as normal across all affected V3 deployments.
WETH is a tokenized version of ether used across DeFi apps as usable collateral across six major networks. The restrictions were introduced after attackers exploited a bridge tied to Kelp DAO’s rsETH, a yield-bearing token linked to restaked ether, minting roughly $292 million in unbacked tokens and using them as collateral to drain about $230 million in ETH from Aave.
The move matters because WETH is one of decentralized finance’s most important collateral assets, widely used by traders to borrow against ether holdings, deploy leverage and fund liquidity strategies.
During the crisis, Aave effectively disabled WETH’s usefulness as collateral by cutting its LTV to 0% across affected markets as an emergency containment measure, meaning users could no longer borrow against wrapped ether positions.
Pre-incident LTVs have now been restored to normal levels, according to Aave governance documents: 80.5% on Ethereum Core, 84% on Ethereum Prime, 80% on Arbitrum, 80% on Base, 80.5% on Mantle, and 80% on Linea.
About 112,103 unbacked rsETH was created in the exploit, with roughly 106,993 since recovered through liquidations and coordinated recovery actions. That includes 89,567 recovered through Aave liquidations and another 17,426 recovered through Compound, leaving a residual shortfall of about 5,200 rsETH, expected to be covered by the industry coalition DeFi United.
For markets, the restoration is a meaningful normalization signal. WETH serves as a core financing asset across DeFi, and disabling its borrowing utility constrained leverage, reduced liquidity efficiency and trapped capital across multiple ecosystems.
Reopening that collateral capacity suggests Aave believes the immediate systemic risk has largely been contained, even as legal disputes over frozen assets and questions around ultimate liability remain unresolved.