Update on the Resolv situation. TLDR: kpk's vault architecture worked as designed under real stress. We detected the risk, paused new allocations, and the vault exited automatically the moment liquidity became available. The withdrawal queue design proved itself without requiring any manual intervention. All Ethereum funds fully recovered. Zero loss to depositors. Following the USR minting exploit on Sunday, our Morpho USDC Yield vaults on Ethereum and Arbitrum had limited exposure to the RLP collateral market. When the risk was detected, we immediately set the risk tolerance on the affected market to zero and blocked new allocations. The vault's withdrawal queue was configured to recover the position automatically as soon as liquidity returned. That's exactly what happened. The moment a borrower repaid, a depositor's redemption cascaded through the vault's withdrawal queue, recovering the full amount. Same block, no manual intervention needed. The vault's architecture handled the exit. Result: all Ethereum funds fully recovered. Zero loss to depositors. Concentration limits had already capped our maximum exposure to the market. This is a core part of how we curate: when an individual market fails, the loss ceiling is set at inception, not determined by the speed of the response. Deposits into the Ethereum Yield vault have been re-enabled. The Arbitrum Yield vault is still paused, with ~$1k remaining exposure to Resolv markets. Withdrawals were available to depositors throughout, across both chains. Where we go from here We're using this as an opportunity to strengthen our monitoring and emergency response processes. This includes enhanced oracle divergence monitoring, faster automated exit triggers, and tighter integration with onchain security alerting services. Full documentation of our vault risk framework, including how caps, tiers, and agents work:

Vault links for depositors: kpk USDC Yield V2 App: Docs: kpk USDC Prime V2 App: Docs: