ether.fi DAO Proposal: Treasury Contribution to restore rsETH's backing

Proposal Summary This proposal authorises the Foundation to deploy 5,000 ETH from the DAO treasury as ether.fi's contribution to a coordinated, cross-protocol remediation effort following the recent rsETH exploit. ether.fi is working alongside Aave and other DeFi ecosystem partners to absorb the shortfall, prevent the accrual of bad debt in Aave and other integrated lending markets, and protect end users across the broader DeFi stack.

Background & Rationale A recent security incident affecting rsETH created a shortfall of user-deposited assets that propagated through multiple DeFi protocols — most notably into Aave, where positions collateralised by affected assets risk becoming undercollateralised and generating systemic bad debt.

Rather than allow the consequences of this incident to cascade across lenders, LPs, and end users, ether.fi is joining Aave and other ecosystem members in a unified remediation response. The objective is simple: contain the damage at the source, ensure no bad debt is left on any lending market, and demonstrate that DeFi participants can coordinate to protect users when it matters most.

The Foundation believes this is both the right action on principle and a meaningful investment in the long-term resilience of the DeFi ecosystem that ether.fi depends on. A healthy, solvent DeFi market — and a DeFi stack that stands together in moments of stress — is directly aligned with the interests of ETHFI holders and ether.fi users. Proposal Details

Remediation Program

• The Foundation is authorised to deploy up to 5,000 ETH from the DAO treasury as ether.fi's share of a coordinated, multi-protocol remediation program addressing the rsETH exploit shortfall.
• Funds will be deployed in coordination with other participating ecosystem partners, and applied to (i) absorbing the user shortfall and (ii) preventing bad debt from forming on Aave and other DeFi venues holding exposure to affected assets.
• The distribution methodology, counterparties, and allocation framework will be published alongside execution.
• Remediation shall commence upon DAO approval and continue until: (a) the coordinated remediation is complete, (b) the 5,000 ETH cap is reached, or (c) a subsequent governance vote modifies or terminates the program.
• Any ETH unspent after the remediation is complete will be returned to the DAO treasury.
• Should funds subsequently be recovered (via restitution, insurance, legal process, or on-chain recovery), recovered amounts will be returned to the DAO treasury up to the value deployed under this proposal.

Voting Options For: Approve the remediation program as described. Against: Do not approve the program. Abstain: Neither approve nor reject.

Implementation Timeline Once approved, the remediation program becomes active immediately. The Foundation will publish the coordinated remediation framework — including participating protocols, allocation methodology, and distribution mechanics — within 7 days of approval, with deployment to follow promptly thereafter.