Wu Blockchain (@WuBlockchain): LlamaRisk, an Aave DAO Risk Service Provider, released its rsETH Incident Report, quantifying the potential bad debt impact on Aave under two scenario…
Estimated coin impact
Scores are not price-change percentages. High impact means a score of +70 or more, or -70 or less.
LlamaRisk, an Aave DAO Risk Service Provider, released its rsETH Incident Report, quantifying the potential bad debt impact on Aave under two scenarios: 1. Uniform loss socialization across all rsETH ~15.12% haircut, resulting in approximately $123.7 million in bad debt, with the largest absolute loss on Ethereum Core and the highest proportional shortfall on Mantle. 2. Losses isolated to L2 rsETH ~73.54% haircut, resulting in approximately $230.1 million in bad debt, concentrated on L2s. Mantle would face a 71.45% WETH shortfall and Arbitrum a 26.67% shortfall, while Ethereum Core would remain unaffected. The report also notes that WETH reserves across chains are at 100% utilization with under $20 of idle liquidity, limiting liquidation capacity and potentially amplifying risk. It recommends pausing the WETH Umbrella module, with bad debt to be addressed jointly by the Aave DAO treasury and ecosystem participants. https://x.com/aave/status/2046321565197905982?s=20