Lido updates on Kelp rsETH exploit: EarnETH vault paused; DAO deploys $3M first-loss backstop

Lido Finance said it has reviewed the status of Lido Earn vaults following the Kelp rsETH incident and confirmed that the core Lido staking protocol, stETH, and wstETH were not affected. The protocol noted that only the EarnETH vault has exposure to rsETH, accounting for roughly 9% of the vault's TVL. Deposits and withdrawals for EarnETH have been paused. Lido added that if losses materialize, a $3 million "first-loss protection" mechanism funded by the Lido DAO treasury would be applied, implemented by burning the DAO's vault shares.