Gate Daily Report (April 21): Lido discloses the EarnETH exposure protection mechanism; DeFi losses exceed $600 million over the past three weeks

Bitcoin (BTC) sees a V-shaped rebound; as of April 21, it was temporarily around $76,028. U.S. President Trump said he is willing to hold direct talks with Iranian leadership. Lido said that the EarnETH treasury holds an rsETH exposure of about $21.6 million, and the loss-protection mechanism is ready. DeFi lost more than $600 million over the past three weeks. The Kelp DAO incident dragged DeFi TVL down to a one-year low.

Macro Events & Crypto Market Hot Topics

1. Lido posted on the X platform that the previously Kelp DAO cross-chain bridge attack resulted in about 116,500 rsETH (about $292 million) being stolen, and the rsETH market on lending platforms such as Aave was subsequently frozen. Through Aave’s rsETH/ETH leveraged positions, Lido’s EarnETH treasury directly holds about 9% rsETH exposure (about $21.6 million).

The EarnETH team is actively deleveraging and reducing risks across its strategies. The final outcome of this rsETH position depends on decisions by Kelp, LayerZero, and Aave. The $3 million “first-loss protection mechanism” provided by the Lido DAO treasury will be used to cover treasury losses when needed. Currently, EarnETH deposits and withdrawals are temporarily paused to ensure fair handling. Lido’s core staking contracts stETH and wstETH are unaffected.

2. According to a report by The Block, multiple DeFi security incidents in the recent three weeks have led to industry losses exceeding $600 million. Among them, the Kelp DAO vulnerability incident (loss of $292 million) further exacerbated the downturn, causing DeFi TVL to fall to about $82.4 billion—its lowest level in a year—down 25% from $110 billion at the start of 2026. On the day after the $292 million attack suffered by Kelp DAO, DeFi’s single-day pullback was about 5.6%. Losses were most evident in lending markets: TVL fell by about 13%, while liquid staking fell by about 3.4%. Decentralized exchange and derivatives protocols also saw declines of 2% to 3%.

Aave has frozen rsETH to limit risk exposure, leading to a liquidity shortage in parts of the stablecoin markets, with tens of billions of dollars in deposits locked up. Arkham Intelligence analysis says that if Kelp DAO cannot raise external funding, options include spreading about 16% of losses among all rsETH holders, or prioritizing the protection of Ethereum mainnet holders and having L2 users bear most of the losses—where the latter would expose rsETH holders on Aave to losses of about $267 million. Kelp DAO, Aave, and LayerZero each shift responsibility to the others. Yearn’s core developer said that all parties have hired lawyers to enter a “everyone-versus-everyone” mode.

News Updates

1. Pharos releases tokenomics: PROS total supply is 1 billion, with 6% allocated to an air drop

2. Curve founder: Single point of failure is harming the DeFi industry; the industry needs to jointly set security standards

3. Analysis: Of about 2,665 OApp contracts on LayerZero, 47% use 1/1 DVN configuration

4. Sonic Labs proposes a quantum-resistant PoS upgrade path, without needing to redesign consensus

5. Apple announces a new boss: Ternas takes over as CEO, and Cook moves to Executive Chairman

6. Slow Fog: Claude Desktop exposed for secretly writing a browser backdoor document

7. Analysis: Global liquidity is expected to tighten by 20% to 25%, creating short-term pressure on Bitcoin

8. Trend Research transfers 5.41 million UNI and 228,000 COMP to a new address, total value $23.32 million

9. Lido: EarnETH treasury holds an rsETH exposure of about $21.6 million; the first-loss protection mechanism is ready

10. Fed nominee Walsch commits to maintaining the independence of monetary policy

Market Performance

1. Latest news on Bitcoin: $BTC sees a V-shaped rebound, temporarily around $76,028; over the past 24 hours, $92.38 million has been liquidated, with longs being the main liquidated side;

2. U.S. stock three major indexes closed slightly lower on April 20, pulling back from record highs. The S&P 500’s five-day rally abruptly ended because tensions between the U.S. and Iran escalated again, and oil prices surged after rebounding. The turbulent situation over the weekend raised doubts about the prospects for the two sides to hold talks before the fragile ceasefire agreement expires. However, the Philadelphia Semiconductor Index closed higher, marking a record high for the ninth consecutive day. The Dow Jones Industrial Average closed down 4.87 points, a decline of 0.01%, at 49,442.56 points; the S&P 500 fell 16.92 points, down 0.24%, at 7,109.14 points; the Nasdaq index fell 64.09 points, down 0.26%, at 24,404.39 points.

(Source: Gate)

3. In the Gate BTC/USDT liquidation map, based on the current 76,035.50 USDT: if it drops to around $76,020, the cumulative amount liquidated for long positions exceeds $48.8 million. If it rises to around $76,162, the cumulative amount liquidated for short positions exceeds $65.24 million. The amount liquidated on the short side is significantly higher than on the long side. It is recommended to reasonably control leverage levels to avoid triggering large-scale liquidations due to market fluctuations.

(Source: Coinglass)

4. Over the past 24 hours, BTC spot inflows were $2.45 billion, outflows were $2.3 billion, resulting in a net inflow of $150 million.

(Source: Coinglass)

5. Over the past 24 hours, contract trading net outflows have led for $BTC, $ETH, $SOL, $XAG, $ZEC , and others, presenting trading opportunities.

Selected Perspectives from X KOLs

Phyrex Ni (@Phyrex_Ni): “Just like the call made for the weekend, after Iran continues to block the Strait of Hormuz, WTI’s price at the CME open on Monday rose. As of today’s close, it has climbed to nearly $87. But today another report came out saying that although Iran is very unhappy, it is still planning to participate in Tuesday’s second round of talks with the United States. The main reason is that Trump has blocked Iranian ports.”

“And when Trump was asked on Thursday, when the ceasefire cycle is due, he said there’s only a very small chance it will be delayed again. I don’t know if it’s to apply pressure to Iran by increasing urgency, but from my own perspective, Trump’s TACO odds are still very high. If they can’t get talks sorted in a day, then opening the Strait of Hormuz completely in a day is going to be difficult.”

“Right now, there’s no better option—just wait. In my view, going short WTI at higher prices is still the first choice. My short position opened at $90 is still being held. Although profits have pulled back a bit, it’s still decent considering I also ate the weekend funding rate. Prepare more positions and keep waiting.”

“Looking back at the Bitcoin data, Monday’s data is still fairly good. Although there was some volatility over the weekend, it’s still within normal levels overall, and the handiness is not too high. Trading volume is also not bad. Investor sentiment is very stable. Thanks to Iran agreeing to hold talks on Monday, both U.S. stocks and $BTC rebounded. At this stage, market sentiment is still being driven by the geopolitical conflict between the U.S. and Iran.”

“Trump’s TACO on Wednesday was okay, but if they really keep resuming hostile actions, the market might turn pessimistic again. Even so, I think that possibility is not very large.”

Outlook for Today

1. UK 3-month ILO unemployment rate ending February; previous value was 5.2%

2. UK 3-month ILO unemployment rate ending March; previous value was 4.4%

3. UK March unemployment rate; previous value was 4.41%

4. U.S. March retail sales (month-over-month); previous value was 0.6%

5. U.S. March NAR seasonally adjusted pending home sales index (month-over-month); previous value was 1.8%

6. U.S. Senate Banking Committee holds a hearing on the nomination of Federal Reserve Chair Kevin Walsch