# Reduce Borrow Collateral Factor for rsETH to 0 on L2 Markets\nThis proposal reduces the collateral factor utilized on borrow for rsETH-once executed, rsETH on Arbitrum WETH, Base WETH, Linea WETH, Optimism WETH and Unichain WETH markets can not be used as collateral for new loans. Note that this proposal will not directly trigger any liquidations as the liquidation collateral factor remains unchanged.\n\nPlease see the forums for further details\n\n* [Kelp Dao Exploit Discussions](https://www.
AI summary
This proposal aims to reduce the borrow collateral factor for rsETH to zero across several Layer 2 (L2) markets on Compound, including Arbitrum WETH, Base WETH, Linea WETH, Optimism WETH, and Unichain WETH. This means that after the proposal passes, rsETH tokens on these specific markets can no longer be used as collateral to take out new loans. The change is a response to a recent exploit involving Kelp DAO's rsETH.
If this proposal passes, users holding rsETH on the specified L2 markets will no longer be able to use it as collateral for new loans on Compound. This change primarily affects those who might have intended to use rsETH for borrowing, and it does not immediately trigger liquidations for existing loans as the liquidation collateral factor remains unchanged. The Compound protocol benefits by reducing its exposure to a potentially risky asset following an exploit.