Lido EarnETH Vault Exposed to $21.6M rsETH Following Kelp Bridge Exploit, DAO Sets $3M Loss Protection

Gate News message, April 21 — Following a Kelp cross-chain bridge exploit on April 18 that resulted in the theft of 116,500 rsETH (approximately $292 million), Lido disclosed that its EarnETH vault holds approximately $21.6 million in rsETH exposure (about 9% of the vault’s assets) through leveraged positions on Aave. The incident prompted Aave and other lending platforms to freeze rsETH markets.

EarnETH has suspended deposits and withdrawals while actively deleveraging to reduce risk exposure. The final loss magnitude depends on subsequent actions by Kelp, LayerZero, and Aave. Lido’s DAO treasury has established a $3 million “first loss protection mechanism” to cover potential losses if necessary, which would be funded through the destruction of DAO treasury shares.

Lido emphasized that its core staking protocol and stETH and wstETH tokens remain unaffected by the incident.