Jay ꩜

It might not be that simple though. According to Aave docs, the junior tranche, aka Umbrella depositors, are supposed to strictly be exposed to the chain they are staking on. That means that an aWETH Umbrella staker on Ethereum mainnet shouldn’t be punished for an unbacked LRT on other chains. The issue is that Aave has no control over how KelpDAO decides to handle the loss. Technically Aave V3 on mainnet is fully collateralized because rsETH on mainnet is fully collateralized. It’s Aave V3 on Arbitrum that technically has bad debt. In a sense I sympathize with the view that the bridged rsETH should bear the brunt of this exploit. Umbrella stakers on mainnet by definition did not sign up to cover losses from another chain. I’m honestly so saddened by this situation. There’s a longtime DeFi user in my DMs who’s suffering as a result of this exploit, and it really breaks my heart💔

🧵 Let's look at how many DVNs are required for your stablecoins or liquid restaked ETH assets that bridge using LayerZero. We learned Kelp only used LayerZero Labs as their 1/1 required DVN. It would also be relevant who the DVNs used are but we'll focus on just count for now.

after spending time on P1, one thing is clear: it doesn’t try to feel like a crypto app at all. everything-from balances to flows-is abstracted into something that feels like a regular finance app. that’s harder to pull off than it looks.