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Lido Says EarnETH Has $21.6 Million rsETH Exposure After Kelp DAO Incident

Lido states its EarnETH product has about 9% exposure to rsETH through leveraged positions on Aave (decentralized lending protocol), and says a $3 million loss buffer may be used depending on Kelp DAO’s actions.

Summary

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Terms & Concepts
  • rsETH: A crypto asset tied to restaking (reusing staked assets for extra yield), referenced here as the exposure held through Lido’s EarnETH product.
  • Aave: Aave is a decentralized lending protocol that lets users borrow and lend crypto assets onchain without traditional intermediaries.
  • leveraged positions: Positions built with borrowed funds to increase exposure, which can amplify both gains and losses.