BlockBeats News, May 9th - Aave has released the Phase 2 announcement of the rsETH incident recovery technical plan. On April 28th, Aave announced the V3 technical recovery plan for the rsETH hack, which has made significant progress on both Ethereum Core and Arbitrum. On May 6th, 8 Aave V3 positions belonging to the attacker were successfully liquidated, and the recovered rsETH collateral was transferred to the Recovery Guardian as per AIP. Other users, including Umbrella stakers, were unaffected. Additionally, governance proposals for Mantle DAO and Arbitrum DAO have both passed. The latter has agreed to return the recovered $71 million worth of ETH to Aave for the DeFi United collective recovery effort. Positive legal developments are also underway: the court has ordered the Arbitrum DAO to transfer the frozen ETH to Aave LLC through on-chain voting, with the restraining order to follow the transfer. Aave LLC is awaiting a final ruling. As a temporary measure, the team has borrowed additional funds to cover the deficit to ensure users are not adversely affected by delays.

The next phase of the recovery plan will focus on addressing the rsETH inflation issue and restoring normal market operations. On Arbitrum, the liquidated rsETH will be burned, and KelpDAO will simultaneously burn the corresponding LayerZero cross-chain message packet to completely eliminate the excess rsETH supply resulting from the attack. On Ethereum, the seized rsETH will be moved to a bridge locker, and in conjunction with the ETH committed by the DeFi United Alliance, the locker will be made whole. Once the backing is completed, the bridge will resume normal operations. Subsequently, rsETH withdrawals will be reopened, and the protocol parameters temporarily adjusted for liquidation will be rolled back. The remaining affected positions will be closed out in ETH form using the raised funds. Additionally, the LTV parameter for WETH on Aave V3 on Ethereum Core will soon return to normal. A compensation inquiry tool is now available for users affected by the rsETH incident to check their expected compensation amount.