Wu reported that DeFiLlama co-founder 0xngmi stated that if Arbitrum's withheld funds are prioritized for its Aave markets, it can significantly mitigate bad debt risks under different scenarios. Their estimates suggest that in a socialized loss scenario, 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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