News linked to both this project and an event.
According to the Lido Governance Forum, Lido Earn contributors have submitted a proposal to the DAO requesting authorization to deploy the existing First Loss Reserve to cover losses arising from the Kelp incident, waiving the original 1% threshold requirement. It is estimated that, assuming the DeFi United rescue plan succeeds, the remaining borrowing-rate losses for Lido Earn’s leveraged staking/re-staking positions will amount to approximately 400–600 ETH. Contributors stated they will collaborate with curators to jointly absorb these losses; however, full coverage by curators alone is currently deemed unrealistic. The proposal stresses that this authorization constitutes a one-time exception specific to the Kelp incident and does not alter the standard 1% threshold rule, does not involve additional treasury allocations, and is not intended to subsidize APY or support post-recovery yields. It further notes that if litigation arises from these losses, associated legal costs alone could reach several hundred thousand dollars. Given that the rsETH situation is expected to be resolved within 5–10 days—and considering the standard snapshot voting window is 7 days—the proposers emphasize the time-sensitive nature of this vote. After resolution, the team plans to publish a comprehensive post-mortem report and advance improvements to risk frameworks and operational mechanisms.
According to the Aave Governance Forum, Gordon Liao, a Circle team member, has submitted an ARFC proposal recommending a two-step adjustment to the USDC interest rate model parameters on Aave v3 Ethereum Core to address the current liquidity shortage in the USDC pool. Current context: Following the rsETH incident on April 18, the USDC pool utilization has remained persistently near 100%, with available liquidity falling below $3 million. The borrowing rate has been stuck at the 14% cap for an extended period, and the pool’s total supply has contracted by approximately $60 million over the past 24 hours. As a result, the market is unable to clear via price mechanisms. The proposal’s core measures are as follows: Step 1 (to be executed immediately by Risk Administrators): Increase Slope 2 from 10% to 40%, decrease the optimal utilization rate from 92% to 87%, and temporarily suspend the Slope 2 risk oracle for USDC. Step 2 (to be completed within 5–7 days via governance vote): Further increase Slope 2 to 50% and reduce the optimal utilization rate to 85%. The proposal argues that many current borrowers are insensitive to interest rates and primarily borrow to bypass withdrawal queues and exit positions. Active leverage, meanwhile, is key to attracting new suppliers. Raising the maximum supply rate to the 40%–50% range is expected to draw in USDC liquidity within hours, driving utilization below the kink point and restoring the market’s normal clearing functionality.