We support the aim of focusing Core on established, liquid collateral and removing risk. We believe rETH falls on the established side of that line, and we ask that it be removed from this ARFC and assessed on its own against the Aave Risk Framework.
rETH meets none of the structural criteria. It is a plain LST backed by staked ETH and fully verifiable on-chain, with no restaking, leveraged wrapping, derivatives or bridge.
rETH demand on Core is steady. rETH backs around $82M of collateral across 317 borrowing positions, with roughly nine times as many tokens supplied as cbETH. Supply has held steady through this year’s market stress and has sat at its 35k supply cap since 6 November, so it cannot grow on Core whatever the demand. Our Saturn 2 release removes the main barrier to rETH demand from larger holders: the lack of a direct redemption path.
rETH positions are low risk and revenue-efficient. rETH mostly backs stablecoin borrowing at moderate leverage, not E-Mode loops. Unlike the looped positions in scope, they pay stablecoin interest to Core’s suppliers rather than capturing a spread, and earn the DAO roughly twice the revenue per dollar of debt.
rETH has operated without loss to holders since launch. Rocket Pool has run on mainnet since November 2021. Every major upgrade is independently audited. We have operational and incident management procedures in place, a bug bounty program, and a Security Council that can pause key protocol functions immediately. We would love to engage with you on assessing protocol and operational risk.
Our request
- Remove rETH from this ARFC and assess it separately against the Risk Framework. We will engage fully with that review.
- We value our long partnership with Aave and want rETH to meet whatever standard Core sets.
We are happy to work through this directly with LlamaRisk.
Darren
General Manager, Rocket Pool