Marc Zeller, the founder of the Aave Chan Initiative (ACI), has introduced a strategic proposal to address the recent Kelp DAO incident. Instead of relying on traditional donation-based rescue operations, Zeller suggests the creation of a specialized deposit vault designed to leverage the existing revenue streams of the Aave protocol. This initiative aims to provide a sustainable recovery mechanism for affected users by utilizing yield-bearing assets and the robust treasury of the decentralized lending platform.
The "DeFi United Eth" Recovery Mechanism
The core of the proposal involves the establishment of a deposit vault titled "DeFi United Eth." According to the plan, this vault would tap into wETH (Wrapped Ether) revenue generated by Aave, offering an expected annualized interest rate of approximately 5%. This structure would allow for the issuance of a new tradable token, AaveETH, which represents a claim on the vault's assets.
- The vault capacity would be strictly capped at the total deficit calculated from the worst-case scenario of the Kelp incident.
- AaveETH would serve as a liquid instrument, allowing users to trade their positions while the vault gradually restores principal and interest.
- The strategy focuses on long-term debt amortization through protocol earnings rather than immediate capital injections.
Institutional Support and Financial Rationale
Zeller highlighted the significant financial strength of the Aave ecosystem as a justification for this alternative approach. He noted that both the Aave DAO and Aave Labs currently manage treasuries valued in the nine-figure range, providing ample resources to backstop such a recovery effort. The proponent suggests that the scale of Aave’s current revenue generation makes a structured vault more efficient than decentralized crowdfunding or donations.
Aave has substantial revenue, with Aave DAO and Aave Labs each possessing nine-figure treasuries, which could have solved the problem.
By utilizing a smart contract-based vault, the proposal seeks to maintain transparency and ensure that the recovery process is automated and predictable. This method aims to stabilize the DeFi ecosystem by demonstrating that major protocols can provide infrastructure-level solutions to cross-platform liquidity crises.
The proposal represents a shift in how Decentralized Finance protocols handle emergency mitigations, moving away from "ad-hoc" community bailouts toward structured financial products. If implemented, the DeFi United Eth vault could serve as a blueprint for future incident responses across the Ethereum blockchain, utilizing protocol-generated yield to restore user confidence and financial solvency without depleting core reserves.
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