Kelp incident response

Vaults SteakHouse Financial
1

At 06:16am UTC, Kelp suffered from an infinite mint glitch that allowed the issuance of 16,949,769,554,642,466.836005513427811988 rsETH

At 10:55am UTC, Kelp issued a technical update assuring the market that the mint glitch would not result in excess secondary issuance of insolvent rsETH

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At 12:30pm UTC, a war room was opened and, as an outcome of our risk management procedures, we made a determination to delist rsETH while the situation develops, with a view to not face avoidable risk events. Notably, closing mints and withdrawals of rsETH, in combination with volatile news around the asset, increase the risk of secondary market deviations that present a vector of risk to rsETH/ETH and rsETH/wstETH markets until the situation stabilizes

At 12:31pm UTC, available liquidity was removed from markets at risk, removing 18.4 ETH which was the exposure of Smokehouse vaults to the asset.

At 12:37pm UTC, the public allocator for those markets was deactivated.

There is no remaining exposure in any Steakhouse curator vaults, notably bbqETH and bbqWSTETH. We are actively monitoring the situation and will reinclude the asset subject to additional technical due diligence and team updates

2

After a thorough review of the incident with the Kelp team, we are confident that the Kelp team implemented the appropriate measures to avoid such situation.

For clarity, there was no immediate impact from the issue thanks to their strong codebase (embedded circuit-breaker) and good team response. As a precaution, we exited the market to mitigate the risk of any potential adverse event, out of abundance of caution, which ultimately did not occur.