Lido

Lido's stETH rebase has returned to normal after yesterday's miscalculation, which resulted in a lower-than-expected daily APR of 2.04% instead of 2.15%. **What happened:** - A single validator with a pending 32 ETH deposit was unaccounted for in the oracle report - Today's rebase included the missing ETH, with an extrapolated APR of 2.29% - An audited protocol oracle update has been implemented to improve report speed **Key points:** - No funds were at risk at any point - The issue was an edge case, not protocol penalties - Contributors are completing root cause analysis - A full post-mortem will be published soon No user action was required throughout the incident.

Lido's protocol demonstrated its built-in safety mechanisms during a recent stETH rebase miscalculation incident. The protocol features **automatic guard-rails** that govern allowable values for daily rebases. Key details: - The actual delta was 3.6% of TVL within a 36-day window - This fell within the allowable range, so automated stops did not trigger - Had the delta been significantly larger, guard-rails would have automatically halted the accounting oracle report settlement The safety mechanism ensures that **oracle miscalculations cannot trigger liquidations on lending markets**. This protective layer activates when deviations exceed predetermined thresholds, preventing cascading effects across DeFi protocols that use stETH as collateral. The incident involved a single in-flight validator deposit (32 ETH) being unaccounted for, resulting in a daily rebase APR of 2.04% instead of 2.15%. No funds were at risk, and the issue has been resolved with subsequent rebases accounting for the previously under-calculated balances.

The Lido Core upgrade has successfully passed all required checkpoints and is ready for mainnet deployment. **Key milestones completed:** - Testnet deployment finished - Two independent security audits completed - On-chain DAO vote approved (July 15-17) - Dual Governance review passed with no veto **What's included:** - Community Staking Module (CSM) upgrade to v3 - New Curated Module v2 - Built on Staking Router v3 **For stakers:** No action required. This is a protocol-level upgrade that will be deployed automatically to mainnet.

Lido has published multiple security audit reports for its upcoming protocol upgrades: **Staking Router v3 & Community Staking V3:** - [Certora audit report](https://github.com/lidofinance/audits/blob/main/Certora%20Staking%20Router%20v3%20Audit%20Report%2007-2026.pdf) - [Statemind audit report](https://github.com/lidofinance/audits/blob/main/Statemind%20Staking%20Router%20v3%20Audit%20Report%2007-2026.pdf) **Voting Contracts & Easy Track Factories:** - [MixBytes audit report](https://github.com/lidofinance/audits/blob/main/MixBytes%20Lido%20Easy%20Track%20Factories%20(SRv3%20CSMv3%20CMv2)%20Security%20Audit%20Report%2007-2026.pdf) **Off-chain Oracle:** - [Composable Security consultation report](https://github.com/lidofinance/audits/blob/main/Composable%20Security%20Lido%20Oracle%20V8_0_2%20Security%20Consultation%20Report.pdf) Staking Router v3 introduces stake reallocation through consolidations, support for large validator deposits, and streamlined validator management.

Lido has completed security audits for its Core upgrade, maintaining its standard practice of dual independent reviews. **What was audited:** - Smart contracts - Governance components - Off-chain infrastructure The protocol continues its track record of rigorous security practices, having conducted over 100 audits throughout its history with no user funds lost to date.

Aave has increased its supply cap to support a new strategy implementation. **Key Changes:** - Higher deposit limits now available for users - Additional allocation space created for new positions - Cap adjustment follows previous capacity increases in April This expansion continues Aave's pattern of gradually scaling supply and borrow limits as demand grows. Users can now deploy larger positions within the protocol's updated parameters.

EarnUSD has introduced a new strategy allocation featuring PT-srUSDe loops. The approach combines: - Fixed-yield principal tokens (PT) on Strata Markets' senior sUSDe tranche (srUSDe) - Looping mechanism on Aave - Boosted leverage through Twyne - Powered by Pendle Finance The structure offers **fixed rates on top** with **first-loss capital underneath** for risk management. This builds on previous integrations where PT srUSDe gained support for 1-transaction looping, unwinding, and position optimization through DeFi Saver.

**Lido has achieved a perfect 12/12 score** on Aragon's Token Ownership Index, demonstrating strong tokenholder governance. **Key developments:** - Tokenholders maintain exclusive control over treasury allocations - LDO Accumulation Program underway with 471 stETH deployed in Batch #1 - Current batch closes May 29 - Automated buyback proposal passed via Snapshot vote - Onchain implementation scheduled for July The Token Ownership Index measures how much control tokenholders actually have over protocol decisions and assets. Lido's perfect score indicates tokenholders retain full authority over treasury management. [View announcement](https://x.com/LidoFinance/status/2057119256928542748)

**Financial Performance** Every quarter through Q1 2026 closed with a surplus, marking consistent profitability. **Key Metrics** - DAO Take Rate reached an all-time high of **6.10% in May** - Up from 4.96% in December, representing a **23% increase** - April results remained flat due to a one-time **$5.7M contribution to DeFi United** The steady quarterly surpluses demonstrate sustainable operations, while the rising take rate indicates improved revenue capture from protocol activity.

**KelpDAO Exploit Resolution Complete** A LayerZero bridge exploit left rsETH underbacked by over 100,000 ETH, directly impacting Lido's EarnETH vault with approximately $20M in rsETH exposure. **Community Response** - The 'DeFi United' initiative successfully raised 132,000 ETH to address the rsETH shortfall - Lido DAO contributed 2,500 stETH to the recovery effort - EarnETH's first-loss protection mechanism burned 144 ETH to fully cover user funds **Current Status** After 27 days of being frozen, the EarnETH vault is now operating normally. All affected users have been made whole through the combined efforts of the DeFi United initiative and Lido's protection mechanisms. The incident demonstrated the effectiveness of Lido's first-loss protection framework and the broader DeFi community's ability to coordinate recovery efforts during protocol exploits. [Full details](https://x.com/LidoFinance/status/2057452890281640296)