Lido discloses Kelp security incident impact, approximately 9% exposure in EarnETH affected

Deep Tide TechFlow News, April 23 — Lido announced the latest updates regarding the Kelp security incident, saying its Earn series vaults are working with the management team to address the issues, involving two key risks: rsETH exposure and liquidity stress in the lending market. Lido emphasized that the core staking protocol has not been affected, and both stETH and wstETH remain secure and stable.

At present, only the EarnETH vault has rsETH exposure of about 9% of TVL. Related deposits and withdrawals have been suspended by the management, pending the implementation of a solution. In the earlier attack, about $70 million worth of ETH has been recovered, and the subsequent asset restoration and loss allocation are still underway. In response to liquidity pressure, the management has reduced leverage and optimized the position structure, significantly decreasing the wETH debt exposure. If losses ultimately occur, EarnETH will activate a $3 million “First Loss Protection Mechanism” (covered by the DAO). As for other vaults, DVV and EarnUSD are unaffected and operating normally; the GGV sub-vault currently shows negative returns due to the cyclical staking strategy combined with rising lending interest rates, but adjustments are ongoing. Withdrawal requests submitted by users earlier will be processed based on the valuations prior to the incident.