AAVE, the native token of the Aave DeFi platform, is now available on the Solana blockchain network.
This move gives Solana users access to one of the largest lending protocols in decentralized finance without leaving the network.
This came less than two days after the Solana Foundation revealed it would deploy part of its treasury in Aave.
In this move, the nonprofit joined a broader industry effort to contain the fallout from the $292 million KelpDAO rsETH exploit and restore confidence in decentralized credit markets.
Solana Foundation supports Aave’s recovery
On April 25, Lily Liu, chairman of the foundation, said The nonprofit is lending USDT to Aave to support recovery efforts after the exploit exposed major DeFi protocols to unsecured collateral and liquidity stress.
The move marks an unusual cross-chain intervention from Solana, which has spent years building its own DeFi economy around native lending, trading and liquid staking applications.
It also gives the foundation a direct role in a recovery effort focused on Aave, a protocol more closely tied to Ethereum and its layer 2 networks.
Liu described the move as support for the broader open financial market, saying that blockchain economies do not operate in isolation and that Solana’s long-term health depends on a functioning DeFi sector outside its own ecosystem.
For Solana, the intervention signals that competition between chains does not prevent coordination when failure threatens the market structure on which they all depend.
A bridge failure becomes a DeFi problem
The $292 million exploit on April 18 started with KelpDAO’s rsETH, a liquid repossessing token, after attackers reportedly exploited a weakness related to the LayerZero bridge configuration.
According to reports, the attackers were able to redeem 116,500 unbacked rsETH tokens on Ethereum before depositing the assets as collateral with Aave, Compound, and Euler, and then borrowing approximately $292 million worth of ETH and other assets.
This action caused a broader contagion, especially in Aave’s credit markets, where platform users left in droves, and resulted in WETH usage reaching 100% within hours of the exploit.
Galaxy research explained:
“At full utilization, Aave’s design does not allow withdrawals because there is no useless liquidity in the pool to repay against. Whoever withdraws first will be cured, while whoever comes later will have to wait for new supply to arrive or borrowers to repay.”
Oak Research, a crypto intelligence firm, said the massive exit led to a 17% decline in the total value captured in DeFi, with Aave experiencing outflows of over $12 billion.
The company argued that the episode could have been a decisive failure for DeFi because it combined a misconfiguration of the bridge, a systemically important lending platform and lenders being unable to withdraw funds from depleted pools.
The liquidity crisis also showed how credit protocols can function as designed while still importing risks from outside the infrastructure.
Aave pools are dependent on the normal functioning of borrowers, collateral and liquidations. When collateral quality suddenly collapses, lenders may wait for liquidity until borrowers repay, liquidations occur, or new deposits enter the market.
Can ‘DeFi United’ restore investor confidence?
In response to the incident, Aave and KelpDAO helped organize DeFi United, a recovery vehicle aimed at replenishing rSETH reserves and restoring affected users.
According to DeFi United’s official website, the effort has attracted pledges of nearly $240 million from several major DeFi participants, including Aave DAO, Arbitrum DAO, Mantle, Ether.fi, Lido, Kelp, Golem Foundation, and individual contributors.
Oak Research said this recovery effort is working because Aave’s protocol was compromised.
According to her, the response would have been different if the losses had been limited to a smaller readmission protocol or a bridge without broader systemic importance. As the largest DeFi lender, Aave had stronger incentives to maintain its reputation and avoid a precedent in which lenders would suffer losses from collateral accepted by the protocol.
That makes Solana’s support remarkable. The foundation is undertaking an industry-wide effort to prevent bridged collateral from damaging trust in DeFi’s largest lender.
The move also gives Solana a strategic opening. Bringing AAVE to Solana could deepen cross-chain liquidity, broaden access for Solana users and give Aave another distribution channel at a time when credit protocols are reassessing collateral risk, bridging dependencies and taking emergency measures.
Meanwhile, the recovery may still leave governance issues unresolved. Aave token holders must weigh the costs of using treasury assets against the reputational risk that users may absorb losses.
While DeFi United can help close the immediate gap, the KelpDAO exploit has already shown that collateral standards, bridge design, and protocol risk controls are no longer separate issues.