Fluid transfers protocol position liquidation to cover Resolv bad debts, sparking controversy as the community accuses it of "using user liquidity to cover bad debts"

Jinse Finance reported that on May 18, Curve founder Michael Egorov expressed confusion over Fluid's latest governance proposal, which would transfer fGHO and iETHv2 positions from the protocol treasury to the team multisig for the purpose of repaying the bad debt left over from Resolv's depegging. Aerodrome community member jpn memelord believes that there was insufficient communication regarding this move, which indirectly alters USDC/USDT depositors’ risk exposure, essentially using user liquidity to cover bad debt. The Fluid team responded that this is a normal technical operation to unify and liquidate thousands of Resolv-related debts, the total amount of protocol assets has not changed, all steps have been conducted within the governance framework, and the proposal had been prepared in advance. In March of this year, the Resolv protocol suffered a hack to its signature infrastructure, resulting in the malicious minting of approximately $80 million in uncollateralized USR stablecoins, which caused a severe depeg of USR, while Fluid, due to lagging oracle prices and other factors, was exposed to approximately $21 million in bad debt.