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Lido has paused its EarnETH vault and activated a $3 million first-loss protection after the Kelp rsETH hack. The crypto hack market for another $100 million+ incident by December 31 now sits at
## Market reaction
Traders in the crypto hack market appear to have priced in the $292 million exploit via KelpDAO’s rsETH token. This is the largest hack of the year. Emergency market freezes followed, and DeFi TVL dropped across nine affected protocols.
## Why it matters
Lido paused deposits and withdrawals in the EarnETH vault, which has roughly $21.6 million in exposure. The DAO’s $3 million first-loss protection acts as a buffer against potential losses from the exploit.
The stETH and wstETH staking protocols remain unaffected. But the incident exposes ongoing risks in cross-chain bridges and DeFi counterparty relationships, the same category of vulnerability that produced the exploit.
## What to watch
At 100% YES odds, the market has already resolved in practice, leaving no speculative upside. The question now is whether additional incidents occur before December 31 and how protocol responses (like Lido’s vault pause) limit contagion.
On-chain investigators like ZachXBT and security firms like Chainalysis and CertiK are tracking exploit patterns and vulnerability disclosures. Their findings will shape how traders price related markets going forward.
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