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DefiLlama founder predicts three handling paths for the Kelp DAO incident and the corresponding potential bad debt scale.

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PANews
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4 hours ago
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PANews April 20 news, according to DefiLlama founder 0xngmi's analysis on the X platform, Kelp DAO faces three potential handling paths in the rsETH event: DefiLlama founder 0xngmi analyzed on the X platform that KelpDAO faces three potential handling plans: Plan one, share the losses among all users, resulting in an 18.5% depreciation for users; Plan two, concentrate all losses on L2 rsETH holders, with Aave utilizing the fund pool to rescue mainnet users but abandoning the L2 market; Plan three, refund assets to holders using a snapshot before the attack, compensating only the portion borrowed by the hacker, which is extremely difficult to operate.

  • If the sharing plan is adopted, there are currently about 666,000 rsETH across all Aave deployments, with all positions on the mainnet close to the maximum circulating loan, assuming all chains are at the liquidated LTV (95%), the net value of these positions will be zeroed out, of which 13.5% will become bad debt, approximately 216 million dollars. Umbrella ETH can cover 55 million dollars, Aave's available fund pool can additionally cover 85 million dollars, the remaining 76 million dollar gap can be compensated through loans or selling AAVE tokens worth 51 million dollars in the fund pool.
  • If the plan to concentrate losses on L2 holders is adopted, Aave has about 359 million dollars (calculated at the current oracle parity) in rsETH supply, assuming all are maximally leveraged, it will generate 341 million dollars in bad debt. Umbrella cannot cover this portion of the loss, Aave will need to bear it themselves, and can choose to use the fund pool or loans to rescue part of the market while letting L2 markets such as Arbitrum, Mantle, and Base fail.
  • The third plan involves the hacker borrowing 124 million dollars from the Aave mainnet and 18 million dollars from Arbitrum. If only this portion of the borrowings is compensated, the loss after Umbrella coverage will be about 91 million dollars. However, due to the significant flow of funds after the attack, and the protocol pool cannot distinguish depositors, the implementation difficulty is extremely high.

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