Lido proposes using up to $5.8M stETH to cover Kelp’s funding gap

Odaily reported that the Lido team has initiated a proposal, planning to allocate up to 2,500 stETH (approximately $5.8 million) from the DAO to cover the rsETH asset shortfall resulting from the recent attack on Kelp DAO.

Lido noted that the LayerZero-based exploit has led to insufficient rsETH reserves, triggering a chain reaction across the DeFi ecosystem, including rising interest rate pressure, tightening lending markets, and certain leveraged strategies facing passive liquidation risks.

The proposal emphasizes that these funds will only be used as part of a complete recovery solution, provided that the overall shortfall can be fully addressed.

Previously, the approximately $292 million attack on Kelp DAO had already impacted Aave, leading to bad debt issues, and its total value locked (TVL) once declined by nearly $8 billion.