Lido Proposes Temporary Adjustment to EarnETH Loss Protection Threshold

Lido's research forum has introduced a new proposal suggesting that the DAO temporarily lower the loss protection trigger threshold for the EarnETH treasury in response to the Kelp incident. According to Foresight News, the current rules stipulate that Lido Earn's protection mechanism activates only when treasury losses exceed 1% of holdings. However, the proposal notes that if the rsETH shortage is resolved through DeFi United, actual losses might be below 1%. To ensure full compensation for EarnETH users, the proposal recommends a one-time exception to utilize the initial loss fund to cover losses below the 1% threshold. The estimated residual borrowing rate loss is between 400 and 600 ETH. The proposal emphasizes that this measure is a one-time arrangement for user protection, brand reputation, and business considerations, and does not alter the general 1% rule. Given that the rsETH issue is expected to be resolved within 5 to 10 days, and the standard voting window is 7 days, the proposal is time-sensitive.