Lido: rsETH Risk Exposure Approximately $21.6 Million, $3 Million First Loss Protection to be Activated if Necessary

robot
Abstract generation in progress

On April 21, Lido announced on social media that its EarnETH treasury was affected by the theft of 116,500 rsETH (approximately $29.2 million) from the Kelp DAO cross-chain bridge on April 18. EarnETH holds approximately $21.6 million in rsETH risk exposure through leveraged positions in rsETH/ETH on Aave, accounting for about 9% of the total assets in the treasury. The EarnETH team is currently actively deleveraging to reduce risk, with outcomes dependent on the final decisions made by Kelp, LayerZero, and Aave regarding loss sharing and bad debt handling. Lido further stated that EarnETH has a $3 million ‘first loss protection mechanism’ funded by the Lido DAO treasury, which will be used to cover losses if necessary. The treasury has currently suspended redemption processing to assess the losses. This incident does not affect stETH and wstETH, and the core staking protocol of Lido is not involved.

ETH1.71%
AAVE-0.68%
ZRO2.61%
STETH1.16%
This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.
  • Reward
  • Comment
  • Repost
  • Share
Comment
Add a comment
Add a comment
No comments
  • Pin