- The use of stolen RSETH as collateral created bad debt on Aave.
- To eliminate it, it is necessary to lower the RSETH rate one way or another.
- In this case, cryptocurrency owners will suffer losses.
Employees DeFi Aave published report, which outlines how they plan to address the issues raised by the Kelp hack. DAO.
How to Reported redaction Happy Coin News, Kelp DAO was hacked on April 18. 116,500 Kelp were stolen from the platform. DAO Restaked ETH (RSETH) worth $274,8 million, of which 89,567 were transferred to Aave. 82,650 Wrapped Ether (WETH) and 821 Lido wstETH (WSTETH).
For security reasons, Aave employees froze WETH, RSETH, and WSTETH, and adjusted the rates on WETH loans and deposits to improve the stability of the WETH lending platform. However, the bad debt persisted, and two options were devised to address the situation:
- Diluting the RSETH supply with unsecured coins will cause the asset’s price to become unlinked from 1 ETH, amounting to 84,89% of the Ethereum price, and all cryptocurrency owners will suffer losses;
- Reduce the value of RSETH tokens issued in second-layer networks of the Ethereum blockchain so that it corresponds to the value of assets that ensure the stability of the coin’s exchange rate. In this case, only RSETH holders in second-layer networks will suffer financial losses.
Thus, the consequences of a cyber attack will hit users’ pockets in any case. DeFiThe only question is whether these losses will be distributed among all investors or only among those who used RSETH in second-tier networks.
Meanwhile, the Kelp hack DAO negatively impacted not only Aave. After the hack, the value of assets locked in DeFi based on the Ethereum blockchain, decreased by 17,8% from $56,51 billion to $46,44 billion. This can be explained by market participants’ concerns about their savings, caused by successful cyberattacks on Kelp DAO и Drift Protocol.
Decrease in the amount of cryptocurrency on the balance DeFi in the ETH network
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