Arbitrum price outlook amid push for unfreezing of Kelp DAO exploit funds

Arbitrum’s ecosystem is at the center of a major DeFi recovery effort, with leading protocols urging the Arbitrum DAO to unfreeze roughly 30,766 ETH (worth about $71 million) linked to the Kelp DAO exploit.

With the funds now locked in a DAO-controlled address, decision-making power has effectively shifted to Arbitrum governance.

DeFi players urge Arbitrum DAO to release frozen funds

Aave Labs and Kelp DAO, joined by LayerZero, EtherFi, and Compound, have filed a Constitutional Arbitrum Improvement Proposal (AIP) asking the Arbitrum DAO to approve the release of approximately 30,766 ETH that was frozen by the Arbitrum Security Council on April 21.

The funds were moved from the exploiter’s wallet to an address controlled by the DAO and can only be transferred through a formal governance vote.

The coalition wants the ETH directed into a dedicated recovery vehicle tied to the broader “DeFi United” initiative, which aims to restore full backing for rsETH and reduce bad debt across lending platforms such as Aave.

“If released, the funds will be directed into DeFi United, a coordinated cross-protocol recovery effort aimed at restoring rsETH backing and remediating impairment of rsETH for users. This contribution would meaningfully advance the path to resolution as others confirm their commitments,” the proposal reads in part.

“DeFi United” has so far attracted roughly 102,542 ETH, a significant portion of the original 163,200 ETH shortfall, leaving about 60,658 ETH remaining.

Among public pledges, Consensys has committed 30,000 ETH, while Mantle has proposed a 30,000 ETH credit facility.

Meanwhile, Aave founder Stani Kulechov has pledged a personal 5,000 ETH, alongside contributions from Golem, Ethena, and LayerZero.

ARB price outlook amid DeFi developments

Arbitrum’s price was down nearly 4% in the past 24 hours as the broader cryptocurrency market shed gains early Monday.

The ARB token traded around $0.1260, with intraday volume reaching $76 million, up 11% at the time of writing.

The decline not only reflects the pullback across top altcoins but also raises the risk of a retest of support at $0.12 or lower.

The push to unfreeze the $71 million ETH pool has not added a new layer of governance-driven volatility to Arbitrum’s narrative.

However, ARB holders may weigh the optics of on-chain seizure power against the protocol’s ability to coordinate large-scale recovery.

In the short term, price action could mirror both broader crypto market sentiment and the evolving DeFi outlook.

ARB could rally if there is a cleaner resolution to the Kelp incident, potentially boosting confidence in the broader Arbitrum-based DeFi ecosystem.

Nonetheless, choppy trading may persist as the community debates the balance between security and decentralization, while cryptocurrencies continue to navigate macroeconomic and geopolitical pressures.

On the upside, ARB could hold above current levels and attempt a retest of the $0.15–$0.20 range.

Over the longer term, key targets remain $0.50 and $1.

If downside pressure intensifies, the main support level lies near the all-time low of $0.086, reached on March 30, 2026.

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