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- Mantle has proposed a credit facility of up to 30,000 ETH to help Aave DAO address bad debt tied to the Kelp rsETH exploit.
- The loan would be yield-bearing, secured, and used exclusively to resolve the rsETH shortfall on Aave V3.
Mantle is considering a sizable treasury intervention to help contain the damage from the Kelp exploit, offering Aave a potential ETH credit line rather than a simple bailout.
On Thursday, the Mantle Core Contributor Team published MIP-34, a proposal that would authorize the Mantle Treasury to lend up to 30,000 ETH to Aave DAO. The funds would be used exclusively to deal with the rsETH bad debt on Aave V3, a problem that has lingered since the exploit exposed deeper stress across parts of DeFi’s leveraged staking ecosystem.
Mantle is pitching the loan as both support and strategy
The framing is notable. Mantle is not presenting the proposal as charity. It describes the facility as a way to convert idle treasury assets into a yield-generating credit position, while also supporting broader industry resilience at a moment when confidence is under pressure.
Under the proposal, Mantle Treasury would receive interest on the loan, with indicative pricing set at Lido staking APR plus a 1% premium, subject to final negotiation. The maturity could run for as long as 36 months, though Aave would be allowed to repay early without penalty.
That structure gives the offer a more institutional feel than the usual DeFi emergency patch. It is rescue capital, yes, but with terms, yield and security attached.
The proposal also ties into Mantle’s longer game
Mantle said the arrangement could strengthen its relationship with Aave and help accelerate Aave’s deployment on the Mantle Network. Interest proceeds, if the facility is used, would flow back to Mantle’s treasury and could then be directed toward MNT token burns or broader ecosystem funding.
Risk protections are also built into the proposal. Mantle said the loan would be secured through a designated multisig wallet, over which the treasury would hold a first-priority lien and security interest.
That detail matters because the market is no longer especially tolerant of vague recovery plans. If this goes ahead, Mantle appears determined to structure it as a protected treasury asset, not an open-ended gesture.
The bigger point is hard to miss. The Kelp exploit is no longer just Kelp’s problem. It has become the kind of second-order DeFi event that forces other major protocols and treasuries to decide whether they are willing to step in, and on what terms.
