Aave stabilizes liquidity above $15B after rsETH exploit amid legal and governance challenges

Aave responded to the rsETH exploit by liquidating stolen positions and coordinating DAO-led recovery efforts, stabilizing liquidity above $15 billion. The recovery included moving recovered collateral to protect unaffected users and recapitalizing the bridge lockbox. However, legal disputes, including U.S. court restraints linked to unrelated claims, threaten to delay full recovery and affect market confidence. Despite these challenges, Aave's actions have helped contain insolvency risks and restored some user trust in the DeFi ecosystem.