Svmuu News Aave has officially addressed the bad debt resulting from the rsETH theft incident, stating that based on different handling scenarios for rsETH, there could be two potential bad debt outcomes.
If the stolen losses are written off from the entire circulating supply of rsETH, it is estimated to result in $123.7 million in bad debt. In absolute terms, this is concentrated on the Ethereum mainnet, while proportionally, it is most severe on Mantle.
If the value of rsETH on the mainnet is protected, and all losses are attributed to the bridged version of rsETH on Layer2, it is estimated to result in $230.1 million in bad debt, entirely on the Layer2 networks. Mantle would face a 71.45% shortfall in WETH, Arbitrum would face a 26.67% shortfall; the Ethereum mainnet would remain unaffected.
Aave added that which scenario ultimately materializes depends on decisions beyond Aave's control, primarily the accounting method for rsETH and the exchange rate update mechanism of the LRTOracle.