Lido: EarnETH Loses Around 9% of Assets in KelpDAO Incident, Core Staked Assets Safe

On April 23, Lido issued an update on the KelpDAO security incident, noting its Earn series vaults are collaborating with the management team to resolve issues tied to rsETH exposure and lending market liquidity crunches. The core staking protocol remains unaffected, with stETH and wstETH secure and stable. Currently, only the EarnETH vault has ~9% of its total value locked (TVL) exposed to rsETH; deposits and withdrawals are temporarily paused pending a resolution. Roughly $70 million in ETH has been recovered from the prior attack, with ongoing efforts to recoup remaining assets and allocate losses. To ease liquidity pressure, the management team has reduced leverage and optimized position structures, cutting wETH debt exposure significantly. Should losses occur, EarnETH will activate a $3 million "first-loss protection mechanism" (covered by the DAO). For other vaults: - DVV and EarnUSD remain unaffected and operational. - The GGV sub-vault is posting negative returns due to a compound staking strategy and higher borrowing rates but is being actively adjusted. Withdrawal requests submitted before the incident will be processed based on pre-event valuations. [Link: https://x.com/LidoFinance/status/2047309147117703199](https://x.com/LidoFinance/status/2047309147117703199)