"This rseth incident with KelpDAO has had a huge impact. A detailed analysis probably won’t settle everything, and the responsibility seems split between KelpDAO and L0. Based on some calculations, here are the potential effects—there might be some over-interpretation here, so feel free to correct me if I’m wrong: 1. The security of packaged assets like LRT can’t compare to native assets. Lending platforms shouldn’t treat these two equally when mixing them for collateral. 2. L0 is likely to lose part of the cross-chain market. Assets like usde and usd0 have already stopped L0’s cross-chain operations. Even if the business resumes, it’ll be hard to restore its original credibility. 3. AAVE’s “golden reputation” has been broken. The safety of unified lending markets is now under scrutiny by whales. Adding each new collateral asset equally increases the risk for existing ones, which is inherently unfair to native assets. V4 and modularization are the trends for lending product development, and this transition will likely accelerate. The focus will shift to lending as a business rather than lending platforms or curators, but the cost of this business is rising. 4. The cost of acquiring TVL on L2 will further increase, and current TVL levels will flow back to L1. 5. DeFi will halt its expansion route and return to a conservative, safety-first mode. It’ll also need to further guard against scans from Anthropic Mythos. #DeFi #Crypto #KelpDAO #AAVE #L0 #TVL #rseth