Risk Management: TradFi vs DeFi Quantitative Analysis

**Last Call for ARB Rewards** Arbitrum DRIP Season 1 has entered its final epoch, marking the last opportunity for users to earn additional ARB token rewards. **Key Details:** - Final epoch now active for DRIP Season 1 - Users can stake rsETH across supported protocols - Extra ARB incentives available during this closing period **Background Context:** rsETH has shown strong performance on Arbitrum, recently becoming the #2 ETH derivative by market cap on the network. The DRIP program has run through multiple epochs, with this final phase concluding Season 1. Participants can explore available opportunities at [arbitrumdrip.com/opportunities](https://arbitrumdrip.com/opportunities).

**Major capital efficiency unlock for rsETH holders on Aave v3 Core market:** - **E-Mode activation** enables rsETH <> ETH loops at up to **93% LTV** (previously capped at lower ratios) - **14x leverage** now possible in one click via Contango integration - **~$1.1B ETH liquidity** available to borrow on Core market - Current conditions deliver **~9% rewards** on leveraged ETH exposure - rsETH supply on Aave Core crossed **$1B**, making it the **#8 largest asset** on the platform **Key improvements:** - Tighter loops with less idle capital - Competitive borrow rates even near utilization kink - One-click execution removes manual looping friction - Cross-chain expansion: $65M+ supply on Avalanche and Base markets **Risk reminder:** Higher leverage amplifies both returns and liquidation risk. E-Mode works best for correlated assets but requires active position management. [Start looping on Aave](https://app.aave.com/reserve-overview/?underlyingAsset=0xa1290d69c65a6fe4df752f95823fae25cb99e5a7&marketName=proto_mainnet_v3)

**New Vaults Launch on Silo Finance** KelpDAO's agETH and hgETH tokens can now be used as collateral on Silo Finance. Users can: - Leverage agETH and hgETH holdings to borrow ETH - Access improved loan-to-value ratios - Benefit from more efficient borrowing terms This integration expands liquidity options for liquid restaking token holders, allowing them to unlock capital without selling their positions.

Kelp has launched **Krunch**, a monthly newsletter focused on institutional developments in crypto infrastructure. The newsletter covers three main areas: - Institutional stablecoin infrastructure - Real-world asset (RWA) convergence - Evolution of on-chain credit markets Krunch aims to deliver signal over noise, providing substantive insights without promotional content. Readers can subscribe to receive the newsletter directly via [Kelp's website](https://kerneldao.com/kelp/#:~:text=Stay%20updated%20with%20Kelp).

**The infrastructure shift is here.** Stablecoins are moving from speculative assets to payment rails. Circle's USDC now integrates with Visa and Mastercard, while Galaxy Digital forecasts stablecoins will surpass ACH payment volume in 2026. **Institutions are deploying capital.** BlackRock, Franklin Templeton, and JPMorgan have moved tokenized funds into production. Standard Chartered's CEO expects most transactions to eventually settle on blockchain. **Real-world credit is connecting to on-chain liquidity.** Tala's $50M USDC facility serves 13M users in emerging markets. Huma Finance has processed $8B linking stablecoin liquidity to payment flows. **The opportunity: $9-11T locked in settlement buffers.** Global payment systems move $200T+ annually, but capital sits idle in receivables and settlement delays. **KUSD targets this gap.** Kelp's stablecoin earns from real-world repayments tied to payment flows and trade finance—not DeFi emissions or speculation. Returns come from actual capital movement through working capital cycles. Short-term, settlement-native credit with on-chain transparency.