A collaborative proposal has been submitted to the Arbitrum DAO requesting the release of Ethereum frozen by the Arbitrum Security Council following a liquid restaking token incident on April 18. The funds would be directed to DeFi United, a multi-protocol recovery initiative aimed at restoring backing for the impacted rsETH asset. If approved, this move could accelerate user recovery and potentially set a precedent for cross-chain crisis response on Layer 2 networks.
Following the April 18 rsETH incident, major DeFi players have initiated a joint recovery effort. A group including Aave service providers, Ether.fi, KelpDAO, LayerZero_Core, and compound_xyz has drafted a governance proposal to the Arbitrum DAO.
The proposal asks for the release of ETH currently held by the Arbitrum Security Council. The group believes utilizing these assets is critical for normalizing rsETH’s status.
The paper is now open for community review. Its authors await feedback from the Arbitrum community to ensure transparent governance and consensus on the recovery process.
If released, the funds would be allocated to DeFi United. This initiative aims to replenish rsETH’s backing by coordinating liquidity and support among participating protocols.
The Arbitrum ETH allocation is considered a foundational step, with further contributions expected from other ecosystem partners to fully remediate the impairment.
The proposal carries both opportunity and complexity. A successful release could lead to rapid user restoration and demonstrate efficient cross-chain governance during emergencies.
Challenges include achieving DAO consensus, managing security considerations, and sequencing multi-protocol contributions. The outcome may set a precedent for handling restaking token risk on Layer 2 networks.
