Lido Earn is adding a buffer for depositors: starting November 5, EarnETH / EarnUSD will have two layers of loss protection.
The first layer is Firelight (incubated by Sentora and built on Flare): it absorbs eligible losses first during each 30-day period—initially covering about 5.7% of EarnETH TVL and 8% of EarnUSD TVL (around $12.1 million / $4 million at current scale). Coverage includes smart contract vulnerabilities, oracle / governance attacks, and bad debt, depegging, or failed redemptions caused by the protocol’s own mechanisms; normal market fluctuations and liquidations are not covered.
The second layer is still Lido DAO’s own position (around $3 million in wstETH for EarnETH and around $2 million in USDC for EarnUSD): once a single-vault loss of ≥1% of TVL is confirmed, up to 100% of the DAO’s shares can be burned to absorb losses before ordinary depositors do.
Depositors don’t need to apply themselves; both layers take effect automatically at the vault level. Protection only applies within the limits, and risk is still risk—it just means there’s a buffer in place when losses hit. $LDO #Lido #DeFi
The first layer is Firelight (incubated by Sentora and built on Flare): it absorbs eligible losses first during each 30-day period—initially covering about 5.7% of EarnETH TVL and 8% of EarnUSD TVL (around $12.1 million / $4 million at current scale). Coverage includes smart contract vulnerabilities, oracle / governance attacks, and bad debt, depegging, or failed redemptions caused by the protocol’s own mechanisms; normal market fluctuations and liquidations are not covered.
The second layer is still Lido DAO’s own position (around $3 million in wstETH for EarnETH and around $2 million in USDC for EarnUSD): once a single-vault loss of ≥1% of TVL is confirmed, up to 100% of the DAO’s shares can be burned to absorb losses before ordinary depositors do.
Depositors don’t need to apply themselves; both layers take effect automatically at the vault level. Protection only applies within the limits, and risk is still risk—it just means there’s a buffer in place when losses hit. $LDO #Lido #DeFi
