Lido DAO has introduced a governance proposal to allocate 2,500 stETH to a relief fund aimed at fully covering the rsETH shortfall stemming from the KelpDAO LayerZero exploit. According to Lido, the initiative is being led by Aave service providers and will include contributions from other ecosystem participants.

Lido's EarnETH vault has direct exposure to rsETH, and if the deficit is not resolved, depositors are expected to face an estimated 9% loss, which would need to be covered in part by Lido's first-loss protection program. If the proposal passes, Lido DAO will transfer the 2,500 stETH to the Aave-led relief vehicle.

Lido also warned that the prolonged deficit could drive positions into forced deleveraging or liquidation. Borrowers on Aave are currently paying elevated borrowing costs amid peaking utilization rates.

Disclosure: Lido is a current sponsor of ETH Daily.

EarnUSD is a stablecoin vault by Lido for earning transparent, onchain USD-denominated rewards. Get started today at stake.lido.fi/earn

Disclaimer: Content is for informational purposes only, not endorsement or investment advice. The accuracy of information is not guaranteed.

• Circle proposal for Aave.

• Road to Devcon 8 grants.

• Fluid aWETH redemptions on L2.

• Shutter DAO funding model.

EarnUSD is a stablecoin vault by Lido for earning transparent, onchain USD-denominated rewards. Get started today at stake.lido.fi/earn

Circle proposes raising USDC borrowing rates on Aave to ease liquidity stress after the KelpDAO exploit pushed utilization to 100%. The plan aims to attract deposits but faces criticism over liquidation risks and Circle’s reluctance to inject liquidity. Read more →

The Ethereum Foundation launched a grant program to fund regional events ahead of Devcon 8 in Mumbai (Nov 2026), with support for meetups, workshops, and discounted tickets for students and academics. Read more →

Fluid expanded its aWETH redemption tool to Arbitrum and Base, enabling users to swap aWETH collateral for wstETH or weETH. The protocol has already processed $400m in volume on Ethereum, helping unwind looped Aave positions. Read more →

Shutter Network introduced PEN, a DAO funding model using a perpetual endowment to generate yield for governance spending, featuring non-transferable voting seats and a dual-vault treasury system. Read more →

• Besu 26.4.0 release

• 200 ETH Security badges issued

• Growthepie app upgrade

• Catalysis live on Ethereum

• Grantr prototype for EIP-8141 frames.

• Dan Finlay leaves Consensys

• Base Kipseli propAMM bug

• Polymarket hair dryer manipulation

• Justin Sun sues WLFI

Disclaimer: Content is for informational purposes only, not endorsement or investment advice. The accuracy of information is not guaranteed.

Fluid extended its aWETH Redemption Protocol to L2 networks, launching first on Arbitrum and Base. The solution allows Aave users to swap their frozen aWETH collateral for wstETH or weETH, for a fee of roughly 2%. On Ethereum mainnet alone, the protocol has already facilitated $400 million in aWETH redemptions.

The service helps protocols unwind looped Aave positions more efficiently. It works by pairing protocols running looping strategies with WETH lenders on Aave. Initial liquidity was absorbed within hours of launch, and the pool is expected to be replenished. EtherFi also launched an aWETH redemption tool for Ethereum mainnet.

EarnUSD is a stablecoin vault by Lido for earning transparent, onchain USD-denominated rewards. Get started today at stake.lido.fi/earn

Disclaimer: Content is for informational purposes only, not endorsement or investment advice. The accuracy of information is not guaranteed.