Lido contributors introduced Lido Lend, a proposed lending protocol, on October 7. An October 16 disclosure described “Fallback Exits,” which would let lenders facing a withdrawal shortfall receive borrower collateral while reducing the affected debt. Healthy borrowers’ positions could shrink before liquidation, but only if the final eligibility rules allow withdrawals from those positions.
The proposal would draw first from borrowers closest to the liquidation threshold. The eligibility cutoff, collateral valuation, debt reduction, fees and limits remain unspecified, as does whether lenders would receive collateral tokens or a claim. In the disclosed ETH/wstETH example, a lender receiving collateral would still need a way to turn that staking token into ETH. Technical specifications, governance steps and public audits remained ahead of a mainnet launch.
