Mantle proposes 30,000 ETH loan to Aave to clear bad debt from Kelp exploit!

Mantle has put forward a proposal to lend up to 30,000 ETH to Aave, positioning the move as a direct response to bad debt that accumulated on the lending protocol following the Kelp exploit. The loan is structured to generate yield for Mantle while simultaneously shoring up Aave's balance sheet.

Beyond the immediate debt relief, the Mantle team framed the proposal as a strategic partnership play — deepening the relationship between two of DeFi's significant protocol players. If passed, the arrangement would mark one of the larger protocol-to-protocol liquidity interventions in recent memory, with Mantle effectively stepping in where a traditional backstop mechanism fell short.

The proposal is still pending governance approval, but its scale and framing signal that larger DeFi actors are increasingly willing to deploy treasury assets to maintain systemic stability across the ecosystem.