Summary
LlamaRisk supports onboarding tETH on the Core Instance. Given the uncorrelated nature of tETH relative to stablecoins, conservatively setting Loan-to-Value (LTV) and Liquidation Threshold (LT) parameters aligns with normal borrow conditions and is similar to existing LRT/Stablecoin eMode parameters.
tETH liquidity conditions have improved, and historical volatility has remained relatively unchanged since our initial analysis on April 25, 2025. Therefore, no greater considerations are placed on LTV/LT constraints for the proposed eMode.
1. Liquidity
Since the initial analysis, DEX liquidity for tETH has increased from approximately $9.2M to over $129M in user deposits since being listed on the Prime instance on June 28, 2025.
Source: DeFiLlama Liquidity, July 17th, 2025
Source: Vaults, Treehouse Finance, July 17th, 2025
The vault capacity has also increased. As of April 8th, 2025, the vault was 87.21% full with a capacity of 100,000 ETH.
2. Volatility
Source: tETH/wstETH, Dexscreener, July 17th, 2025
tETH has traded closely to its underlying asset, wstETH, with deviations from its modeled ratio staying within ±1%. The exchange rate for normal redemptions is based on the value of the underlying assets, while instant redemptions incur a 2% fee. While tETH is a Liquid Staking Token (LST) and not a Liquid Restaking Token (LRT) like ezETH, it shares similarities to onboarded LRTs on the Prime instance because its underlying wstETH is deposited into another protocol (Aave) to leverage additional yield. Applying similar conservative eMode parameters is therefore a reasonable approach.
Disclaimer
This review was independently prepared by LlamaRisk, a community-led decentralized organization funded in part by the Aave DAO. LlamaRisk is not directly affiliated with the protocol(s) reviewed in this assessment and did not receive any compensation from the protocol(s) or their affiliated entities for this work.
The information provided should not be construed as legal, financial, tax, or professional advice.