After the rsETH exploit froze billions on Aave, everyone is asking the same question: is shared pool lending design fundamentally broken? Lotus has been building the answer for almost a year.
David Reising walks through why the obsession with avoiding bad debt has become DeFi lending's biggest self-imposed constraint. Lotus's connected LLTV tranches let borrowers choose their risk level on a continuous curve, from conservative senior lending at 4% to 20x leveraged positions at much higher rates (ie. 22%), with cascading liquidity filling demand wherever it exists and productive debt, providing a stable yield floor beneath everything.
In Lotus, bad debt doesn't get socialized. Instead, it flows exactly where it belongs, to the lenders who priced and accepted that risk.
Lotus is anticipated to launch in summer 2026. Listen to the latest Edge Podcast to get the scoop on this new DeFi protocol!
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🔗 Guest Links 🔗
► Lotus website: lotuslabs.net
► Lotus on X: x.com/LotusFi_
► David Reising on X: x.com/davidareising
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DISCLAIMER: Nothing written in The Edge Newsletter or said on The Edge Podcast is a recommendation to buy or sell tokens or securities. This content is for educational and entertainment purposes only. Nothing shared here is financial advice. Any views expressed in our content are solely the opinion of that writer, host, or guest. Always do your own research. DeFi Dad, Nomatic, and guests may have positions in the assets or other matters discussed in this content. DeFi Dad and Nomatic are advisors to Lotus.
