Aave has reopened wrapped ether (WETH) borrowing across key networks, lifting emergency restrictions imposed after April’s exploit as concerns over systemic fallout ease.

The protocol restored loan-to-value (LTV) ratios on six major chains, reversing safeguards introduced after attackers exploited a vulnerability involving Kelp DAO’s rsETH token. The breach allowed roughly $292 million in unbacked tokens to be minted and used as collateral to withdraw about $230 million in ether from Aave.

WETH is a cornerstone of DeFi collateral, widely used to support borrowing, leverage, and liquidity strategies. At the peak of the incident, Aave reduced its LTV to 0%, effectively disabling its collateral utility to prevent further damage.

With risks now contained, borrowing parameters have been reset to pre-incident levels. LTVs stand at 80.5% on Ethereum Core, 84% on Ethereum Prime, 80% on Arbitrum, Base, and Linea, and 80.5% on Mantle.

The exploit led to the creation of approximately 112,103 unbacked rsETH. Of that total, about 106,993 has been recovered through liquidations and coordinated efforts — including 89,567 via Aave and 17,426 via Compound. A remaining shortfall of roughly 5,200 rsETH is expected to be covered by the DeFi United coalition.

The restoration marks a key step toward normalization in DeFi markets. As a primary collateral asset, WETH’s temporary removal constrained leverage, reduced liquidity efficiency, and locked capital across multiple ecosystems.

By reinstating borrowing limits, Aave is signaling that immediate contagion risks have largely subsided. However, unresolved legal questions around frozen assets and the distribution of losses continue to linger in the aftermath of the exploit.