<![CDATA[What are the two scenarios for handling Aave’s bad debt?]]>07cc7a89-64ef-4e17-b282-696274e0bdf7-image.png
Q: What is the first scenario?
In the first scenario, losses are spread across all rsETH holders on Ethereum and layer-2 networks. This would result in about $123.7 million in bad debt and could cause rsETH to drop up to 15% relative to Ether. The impact is distributed, making it less severe for any single group.

Q: What is the second scenario?
The second scenario concentrates the losses on layer-2 networks like Arbitrum and Mantle. This would increase the total bad debt to around $230.1 million. While more contained geographically, it creates a much heavier burden on those specific ecosystems and could lead to stronger localized instability.

]]>https://undeads.com/forum/topic/18810/what-are-the-two-scenarios-for-handling-aave-s-bad-debtRSS for NodeTue, 09 Jun 2026 07:36:11 GMTTue, 21 Apr 2026 12:22:46 GMT60<![CDATA[Reply to What are the two scenarios for handling Aave’s bad debt? on Tue, 21 Apr 2026 14:52:44 GMT]]>higher bad debt in the second scenario increases the chance of cascading effects within those specific ecosystems

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