1) Distributing the losses among all users. A haircut of 18.5% would result in $216 million of bad debt in Aave. The Umbrella module's insurance coverage is $55 million, Aave's treasury is $85 million, leaving an uncovered gap of $76 million. They could take out a loan to cover the remaining amount or sell AAVE tokens from the treasury ($51 million). 2) Leaving rsETH holders on L2 with nothing. This would lead to $341 million in bad debt, mostly on Arbitrum, Base, and Mantle, without Umbrella coverage. 3) Compensation through a snapshot taken before the cross-chain bridge hack. This is technically challenging due to the active movement of funds. The residual loss after Umbrella coverage would be $91 million. After the Kelp DAO breach, Aave's TVL (Total Value Locked) decreased by $8.9 billion (33.7%) — from $26.4 billion to $17.5 billion.