Wu reported that DeFiLlama co-founder 0xngmi stated that if Arbitrum's withheld funds are prioritized for its Aave market, it can significantly mitigate bad debt risks under different scenarios. Their estimates suggest that in the case of socialized losses, bad debt could be completely eliminated; if rsETH experiences an extreme risk event on L2, the scale of bad debt on Aave in Arbitrum could decrease from approximately $88 million to about $17 million.

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