Co-founder of DeFiLlama presents three strategies for Kelp DAO and Aave to navigate the crisis., 2026/04/20 13:29:00

The co-founder of the DeFiLlama platform, known as 0xngmi, has put forward three potential strategies to navigate the crisis faced by Kelp DAO and the crypto lender Aave, which have lost hundreds of millions of dollars following a hacking incident and subsequent user panic.

The first strategy involves a partial write-off of user funds, resulting in the creation of “bad debt” amounting to approximately $216 million. In this scenario, the affected crypto project could potentially recover by securing loans against remaining assets, selling tokens from its reserves, or a combination of both approaches.

The second strategy entails effectively abandoning compensation for a portion of user losses. This option focuses on the users of the main network. If Aave were to pursue this path, 0xngmi suggests it could lead to the formation of “bad debt” reaching up to $341 million. In such a case, the Aave team might allocate some reserves to cover losses in key networks while maintaining the status quo in others (with the largest user base currently in Arbitrum, Mantle, and Base).

The third proposed strategy could reduce losses to around $91 million. This would be feasible if a portion of the funds taken by the attacker were returned, including approximately $124 million in the main network and $18 million in Arbitrum. However, the execution of this option depends on the technical capabilities for fund recovery, as clarified by 0xngmi. 

Each of the suggested strategies carries significant risks and complex decisions that will necessitate coordination among all ecosystem participants, noted the anonymous co-founder of DeFiLlama.

Previously, the LayerZero protocol, which was affected by the KelpDAO hack, disclosed details of the attack and linked it to the North Korean group Lazarus.