Three options for Kelp to socialize $292M exploit losses: burn bridged rsETH holders, haircut all holders, or pre-exploit snapshot

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Kelp's $292M bridge exploit left Aave holding ~$200M in bad debt, and now the protocol has to decide who eats the loss. Option one burns only bridged rsETH holders on alt chains, limiting blast radius but establishing bridged assets as second-class citizens. Option two haircuts all rsETH holders pro-rata while Umbrella covers the remainder — makes aWETH whole but triggers mass liquidations on Aave. Option three snapshots pre-exploit and dumps everything onto aWETH stakers via the Umbrella backstop, which gets Kelp banned from DeFi and likely sued by Aave.

TLDR by @Benthic

Three options for Kelp to socialize $292M exploit losses: burn bridged rsETH holders, haircut all holders, or pre-exploit snapshot

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Three options for Kelp to socialize $292M exploit losses: burn bridged rsETH holders, haircut all holders, or pre-exploit snapshot

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Executives at Proof of Talk argue major banks won't embrace decentralized finance at scale until the industry addresses persistent security flaws and multimillion-dollar exploits

Radiant Capital is winding down operations nearly two years after its October 2024 exploit, citing failed recovery efforts, lack of fresh capital and an unsustainable operating runway

Gnosis co-founder Martin Koppelmann says it will fully reimburse users after an exploit targeting Gnosis Pay’s Zodiac delay module allowed attackers to initiate transactions from affected wallets

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