Summary
The Arbitrum Security Council has taken emergency action to freeze the 30,766 ETH being held in one of the rsETH hacker’s address on Arbitrum One. As of April 21 03:35:08 AM UTC the funds have been successfully transferred to an intermediary frozen wallet. They are no longer accessible to the address that originally held the funds, and can only be moved by further action by Arbitrum governance, which will be coordinated with relevant parties.
Assuming the same scenarios as in the original post and that the seized funds are returned to Kelp’s rsETH backing (to the total backing under Scenario 1 or to the L2 backing under Scenario 2), we present an estimation of the updated bad debt figures across Aave V3 markets.
Bad debt by debt asset
Under the new assumptions:
- Scenario 1 (uniform socialization) now produces an estimated $62.4M in bad debt vs. the previously estimated figure of $123.7M.
- Scenario 2 (Layer 2 isolated) now produces an estimated $162.5M in bad debt vs. the previously estimated figure of $230.1M.
| Debt asset | S1 bad debt (tokens) | S1 bad debt (USD) | S2 bad debt (tokens) | S2 bad debt (USD) |
|---|---|---|---|---|
| WETH | 26,043.41 | $60,377,758 | 69,680.47 | $161,266,741 |
| wstETH | 717.10 | $2,049,381 | 424.79 | $1,210,515 |
| USDC | 0.00 | $0 | 744.13 | $744 |
| WETH.e (Avalanche) | 0.002 | $4 | 0.010 | $24 |
| Total | - | $62,427,143 | - | $162,478,024 |
Bad debt by chain
| Chain | Scenario 1 bad debt | Scenario 2 bad debt |
|---|---|---|
| Ethereum Core | $46,677,898 | $0 |
| Arbitrum | $5,531,152 | $61,740,363 |
| Base | $3,368,067 | $34,147,805 |
| Linea | $26,146 | $624,625 |
| Mantle | $5,911,064 | $55,977,819 |
| Avalanche | $4 | $24 |
| Ink Whitelabel | $912,812 | $9,987,388 |
| Total | $62,427,143 | $162,478,024 |
Scenario 1 per-reserve shortfall
With the new estimations under the loss socialization scenario, Mantle aWETH holders still absorb the largest relative shortfall at 5.44%. Ethereum takes the largest absolute loss ($44.8M), but the WETH reserve is large enough that the shortfall is only 0.75%. Ink comes in at 1.18%.
| Chain | Reserve | Bad debt (USD) | Bad debt (tokens) | aToken supply (USD) | aToken supply (tokens) | Shortfall |
|---|---|---|---|---|---|---|
| Ethereum | WETH | $44,780,772 | 19,304.59 | $5,979,515,263 | 2,577,715.68 | 0.75% |
| Mantle | WETH | $5,911,064 | 2,551.56 | $108,757,540 | 46,946.15 | 5.44% |
| Arbitrum | WETH | $5,378,898 | 2,325.97 | $331,510,045 | 143,353.39 | 1.62% |
| Base | WETH | $3,368,067 | 1,455.52 | $204,044,391 | 88,178.62 | 1.65% |
| Ethereum | wstETH | $1,897,127 | 663.67 | $3,103,212,462 | 1,085,599.46 | 0.06% |
| Ink | WETH | $912,812 | 394.48 | $77,368,235 | 33,435.23 | 1.18% |
| Arbitrum | wstETH | $152,254 | 53.43 | $55,470,617 | 19,465.40 | 0.27% |
| Linea | WETH | $26,146 | 11.28 | $32,987,373 | 14,237.60 | 0.08% |
| Avalanche | WETH.e | $4 | 0.002 | $32,853,108 | 14,192.62 | 0.00% |
| Base | wstETH | $0 | 0.00 | $37,049,883 | 12,993.15 | 0.00% |
Scenario 2 per-reserve shortfall
Under the scenario which penalizes L2s only, the ranking is preserved between the old and new estimations, but every L2 shortfall drops materially. Mantle aWETH falls from 71.45% to 51.47%; Arbitrum moves from 26.67% to 18.26%; Base from 23.28% to 16.74%; Ink from 18.00% to 12.91%. Ethereum remains untouched because Scenario 2 does not haircut mainnet rsETH.
| Chain | Reserve | Bad debt (USD) | Bad debt (tokens) | aToken supply (USD) | aToken supply (tokens) | Shortfall |
|---|---|---|---|---|---|---|
| Mantle | WETH | $55,977,819 | 24,163.32 | $108,757,540 | 46,946.15 | 51.47% |
| Arbitrum | WETH | $60,529,851 | 26,174.65 | $331,510,045 | 143,353.39 | 18.26% |
| Base | WETH | $34,147,059 | 14,756.79 | $204,044,391 | 88,178.62 | 16.74% |
| Ink | WETH | $9,987,388 | 4,316.12 | $77,368,235 | 33,435.23 | 12.91% |
| Arbitrum | wstETH | $1,210,512 | 424.79 | $55,470,617 | 19,465.40 | 2.18% |
| Linea | WETH | $624,625 | 269.59 | $32,987,373 | 14,237.60 | 1.89% |
| Base | USDC | $744 | 744.13 | $197,709,602 | 197,740,692.27 | 0.00% |
| Avalanche | WETH.e | $24 | 0.010 | $32,853,108 | 14,192.62 | 0.00% |
| Base | wstETH | $2 | 0.001 | $37,049,883 | 12,993.15 | 0.00% |
We will continue to update the community as the situation evolves.
Disclaimer
This report has been prepared using publicly available information and on-chain data at the time of writing, which may be incomplete or subject to change. The analyses, scenarios, and figures presented are based on assumptions and modeling choices that may not reflect actual outcomes. Differences between assumed and realized conditions, including market behavior, protocol actions, and third-party decisions, may result in materially different results.
This report is provided for informational purposes only and does not constitute financial, legal, or investment advice. It should not be relied upon as the sole basis for any decision or action. References to third parties are illustrative and do not imply any commitment, participation, or responsibility by such parties.
No representation or warranty, express or implied, is made as to the accuracy or completeness of the information contained herein, and no liability is accepted for any loss arising from its use.