Foresight News|Oct 16, 2026 14:28
[Lido: Fallback Exits Mechanism Supports Lenders in Withdrawing Borrowers' Collateral During Liquidity Shortages]
Foresight News reports that Lido has tweeted about the Fallback Exits mechanism in its upcoming lending product, Lido Lend. When borrowing asset liquidity is insufficient, this mechanism supplements lenders' withdrawal requests with borrowers' collateral, providing an additional exit pathway for lenders. Lido Lend is built on a modified version of Morpho Blue and operates isolated markets composed solely of related assets, such as wETH and wstETH, or USD and U.S. Treasury RWA. Lenders can exit partially or entirely using borrowers' collateral. When triggered, borrowers closest to the liquidation LTV (LLTV) are prioritized, and their outstanding debt will be correspondingly reduced. Detailed technical specifications and market parameters will be released within the next two weeks, and Lido Lend will go live on the mainnet after completing the DAO governance process.
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