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Aave: is discussing two methods for handling bad debt, with service providers working together with ecosystem participants to resolve bad debt.
Golden Finance reports that on April 21, Aave released an update on the rsETH incident, citing the LlamaRisk report and proposing two bad debt handling scenarios: 1. Losses shared collectively across the entire chain; 2. Losses limited to L2 rsETH; Aave also stated that Aave DAO service providers and ecosystem participants are jointly leading an effort to address any bad debts. This effort has received multiple initial commitments from various parties. It is reported that the Aave DAO protocol treasury reserves approximately $181 million.