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Aave Discusses Two Approaches to Bad Debt Management, Service Providers Collaborate with Ecosystem Participants
On April 21, Aave released an update on the rsETH incident, referencing a LlamaRisk report that outlined two scenarios for handling bad debt: 1. Socializing losses across the entire chain; 2. Limiting losses to L2rsETH. Aave also stated that Aave DAO service providers are leading an effort in collaboration with ecosystem participants to address any bad debt. This initiative has already received several preliminary commitments from various parties. It is reported that the Aave DAO protocol treasury reserves approximately $181 million.