Lido has introduced Firelight-backed protection for its EarnETH and EarnUSD vaults, setting first-period maximums that may limit depositor losses while making any payout dependent on available capital.
In its Nov. 5 announcement, Lido set caps of up to $12.1 million for EarnETH and $4 million for EarnUSD. The initial 30-day period began that day. The limits equaled 5.7% of EarnETH’s total value locked (TVL) and 8% of EarnUSD’s TVL on Nov. 5.
Those figures are ceilings, not guaranteed payments. Protection applies only to losses that qualify under the program and receive approval, and the final amount may be lower if less capital is available when a claim is settled. The arrangement applies at the vault level to depositors in an affected vault.
Firelight is first in the protection order. Lido said its current Firelight coverage is paid for with Current Meta Treasury funds, rather than vault returns. Firelight’s cover is backed by a reserve and staked capital.
Lido DAO may absorb remaining losses through its own vault position, providing a separate layer behind Firelight. The DAO layer is funded by its positions in the vaults. Under separate terms, Lido DAO’s Growth Committee may burn up to 100% of its shares in a vault to absorb remaining losses if a loss of at least 1% of that vault’s TVL is confirmed.
The DAO has used share burning once, Lido said, after the April 2026 Kelp DAO rsETH incident. It approved a one-off exception below the usual 1% threshold and burned shares worth 144.77 Ether (ETH). The exception was specific to that incident.
Before each new 30-day period, contributors confirm which markets are covered and the applicable limits. Lido reports DAO positions quarterly and cited its Q3 2026 report as the latest figures.
