Mantle has put forward a governance proposal to lend up to 30,000 ETH to the Aave DAO to help clean up bad debt tied to a recent exploit. The proposed credit line would come from the Mantle Treasury and target losses on Aave V3 that stem from the rsETH bridge attack involving KelpDAO and LayerZero on April 18.
According to the draft MIP‑34 posted on Mantle’s forum, the funds would be used solely to remediate the debt resulting from the rsETH incident. The idea is to stabilize the affected markets on Aave while turning idle Mantle assets into a yield‑bearing position instead of a one‑way bailout.
Terms of the 30,000 ETH Credit Facility
The loan would run for up to 36 months and charge a variable rate linked to the Lido staking yield plus 1% annual interest, although the final rate could still change.
Aave DAO would be free to repay early without penalties, which could reduce interest costs if markets recover or other funds arrive.
Collateral is a key part of the structure. Under the current terms, Aave would pledge 5% of protocol revenue and at least $11 million in AAVE tokens, along with Ether, into a multisig wallet over which Mantle holds a first‑priority security interest.
Governance Discussions and DeFi Coordination
Mantle’s proposal is still in the discussion phase and has not yet gone to a Snapshot vote. Community members are now reviewing the risk‑return profile, including the loan size, the rate, and how it fits with Mantle’s broader treasury strategy.
At the same time, the Aave community is weighing the offer as part of a broader response to the rsETH exploit. Analysts say confirmed “rescue” capital now roughly covers a 43,500-ETH shortfall across affected positions, showing that several players, including Mantle, are coordinating to contain the damage.
Mantle frames the credit facility as a way to earn risk‑adjusted yield on idle treasury ETH while strengthening ties with one of DeFi’s largest lending protocols. Governance decisions could route interest proceeds back into the Mantle ecosystem, including possible MNT burns or future funding.
For Aave, access to up to 30,000 ETH could accelerate the process of clearing bad debt during the Mantle deployment of Aave V3.
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