Reserve Monitors Kelp DAO Attack, Minimal Impact Expected

Ethereum-based stablecoin platform Reserve is closely monitoring the recent attack on Kelp DAO's LayerZero bridge. According to ChainCatcher, Reserve's official announcement indicates that holders of Reserve DTF are unlikely to be significantly affected by the incident. In the event of a substantial devaluation of rsETH on the mainnet, estimated between 15.5% and 18.5%, there could be potential bad debt for Aave, which might impact Aave V3's USDC collateral. The Reserve protocol's USD3 and eUSD have RSR stakers who may act as 'first loss capital' to provide protection, though the impact is expected to be minimal. The RSR over-collateralization is deemed sufficient to cover any losses. ETH+ and bsdETH are entirely free of rsETH collateral, posing zero risk. As a precaution, Reserve has temporarily paused the minting, rebalancing, and RSR unstaking for eUSD and USD3. Redemption functions remain operational, and users seeking RSR over-collateralization protection are advised to continue holding.