Lido Earn’s new safety net still leaves depositors on the hook for losses
Summary
Lido added Firelight as a first-loss protection layer for eligible, approved losses in its EarnETH and EarnUSD DeFi vaults, ahead of the existing DAO buffer. For the 30-day period starting Nov. 5, Firelight’s stated limits and DAO positions imply combined ceilings of about 7.2% of EarnETH assets and 12.1% of EarnUSD assets. Coverage is subject to market-specific limits, independent approval and available capital; payouts may be smaller than validated losses. Firelight excludes ordinary price declines and several other risks. The DAO layer has separate rules and can burn its vault shares after a confirmed loss of at least 1% of TVL. Neither layer guarantees reimbursement, and losses exceeding applicable coverage may remain with depositors.
