Remediation of Bad Debt From 10/10 Using Reserves

### **Summary** This proposal seeks to use protocol reserves on Base to cover approximately $1.7M in bad debt resulting from the October 10th flash-crash event caused by extreme market dislocation and oracle mispricing. The goal is to restore full solvency and maintain the overall health of the protocol. ### **Background** On October 10th, extreme cross-venue price dislocations allowed an attacker to: - Flash-loan cbBTC/USDC - Use these as collateral - Borrow VIRTUAL, MORPHO, and AERO at...