Lido plans to temporarily lower the first-loss protection threshold for EarnETH vaults to address losses from the Kelp incident.

CoinFeed reported on April 29th that Lido Finance disclosed on its X platform that the Lido DAO is considering a proposal to temporarily lower the first-loss protection threshold for the EarnETH vault from 1% in the event of the Kelp incident. Currently, Lido EarnETH's protection mechanism only triggers when vault losses exceed 1%, but Lido contributors predict that if the DeFi United rescue operation successfully fills the rsETH shortfall, the actual loss could be between 400 and 600 ETH, below the 1% threshold. For the sake of protecting users, maintaining the brand, and mitigating legal risks, the proposal suggests a one-time exception for the Kelp incident, rather than modifying the general 1% rule. This proposal is time-sensitive, as the rsETH incident is expected to be resolved within 5 to 10 days.