As requested, I created a Snapshot vote to move forward with this proposal: Snapshot
Let me know if you need anything else / have any questions. Thanks for your support!
As requested, I created a Snapshot vote to move forward with this proposal: Snapshot
Let me know if you need anything else / have any questions. Thanks for your support!
Hi Marceau
Actually this ARC is lacking sufficient information and a risk analysis for AAVE holders to decide on a potential listing.
Could you please provide up to date information aligned with the asset listing template everyone has been following. The guide is here New Asset Listing - Governance and the template Template ARC Asset Onboarding - Governance
This covers all the important points. Also hoping for up to date information since the initial post on April 2021
Thanks, we’ll get the requested information added.
Hi Alex, I submitted this proposal originally following all the then up to date and relevant procedures. This evening I can provide more information - one challenging limitation at the time I posted was a restriction on the number of hyperlinks (up to 5).
I removed these restrictions for your account.
@MarcZeller, @Alex_BertoG, see below for the additional information requested. This was co-written by the OP here @AmethystWizard and @langers (General Manager at Rocket Pool).
Let us know if you have any questions or need any additional info. We’d love to see rETH get listed and believe it would be a strong value-add for both Aave and the health of the Ethereum network.
The Rocket pool community would love AAVE users to support the listing of rETH as a collateral asset.
rETH is the only liquid staking token that prioritizes decentralization of staking pool operators. Onboarding rETH into AAVE would benefit both communities and Ethereum as a whole as rETH helps to democratize network validation and promotes decentralization of Ethereum staking.
Link to:
rETH is a productive asset it appreciates in value over time based on the rewards generated by Rocket Pool node operators… Wherever ETH is presently used as collateral, rETH would make a better collateral since it accrues the staking reward in addition to the underlying ETH value.
rETH is based on Ethereum staking returns and has a relatively low counterparty risk compared to other yield bearing tokens.
rETH is a good long term holding collateral but many people want the option to access the value now and so want to use it as collateral for loans.
rETH could be used in leverage and hedge trading strategies by borrowing/lending in Aave.
rETH is a standard ERC-20 token and does not rebase and so it should be technically easier to integrate into Aave.
rETH is used as liquidity in a number of platforms on layer 1 and layer 2:
It is also used in yearn trading strategy vaults and in Alchemix as lending collateral.
rETH is only minted when stakers deposit ETH into Rocket Pool for staking.
Market Cap: $165m
Supply: 89,890
Holders: 3,832
Exchanges:
Further information here: Rocket Pool Explorer
rETH token
Date deployed: 30th Sept 2021
Contract address: Rocket Pool: rETH Token | Address 0xae78736Cd615f374D3085123A210448E74Fc6393 | Etherscan
Holders: 3,883
Transfers: 15,512
A comprehensive technical analysis has been conducted by the Maker DAO technical team here is their report:
Our smart contracts have been independently audited by 3 best-in-class audit firms:
A comprehensive risk analysis has been conducted by the Maker DAO risk team here is their report:
A wonderful collection of information. I hope this proves to the Aave community that rETH is ready for the next step – the MakerDAO risk assessment is especially poignant!
Great to see so much ground covered on risk analysis. Would love to hear if the community has any other concerns. Excited to be able to use this!
Really looking forward to this. Have my support.
Thanks for gathering the information for the community
Nice writeup - looking forward to seeing how this progresses.
I have a question/comment/request: I know the goal is to get listed in v2 markets, but v3 markets have rolled out on various L2 solutions like Polygon, Arbitrum, and Optimism.
Could we also get rETH listed as collateral on the L2s that rocketpool already has an LP on? (the L2 LPs where rETH is available is on those three networks per the rocketpool medium article) Do we need a separate inclusion request?
I like polygon for my L2 transactions right now, before I move assets to mainnet to launch a new node, which allows me to gain an advantage in fees.
Very keen for this proposal.
Are there any proposed risk parameters for this? Will it be the same as stETH or lower?
Gauntlet has initiated analysis and is targeting June 30th to provide initial risk parameters aligned with the risk profile of other v2 assets.
Thanks Marceau
Would love to see the rETH risk assessment in the context of the current liquidity crush on liquid staking tokens and of listing on the Aave V2 market where caps have yet to be implemented compared to Maker
rETH is a staking derivative for Rocket Pool, similar to Lido’s stETH.
rETH can be minted by locking ETH in the Rocket Pool contract, making that ETH available for user-run staking nodes. Initially, 1 rETH could be minted for 1 ETH. However, as the pool gains staking yields, the cost of minting rETH gradually rises. It now costs 1.02 ETH to mint 1 new rETH.
Users can withdraw rETH directly from the contract at the same rate it costs to mint, but only when there is rETH available (i.e., when there is excess ETH that hasn’t been locked in a staking pool). There is currently no rETH available to withdraw from the contract.
On secondary markets, rETH currently trades slightly below the minting cost, at 1.01 ETH = 1 rETH. However, like stETH, nothing prevents it from trading below 1 ETH before withdrawals are enabled on Ethereum.
In general, we strongly recommend listing assets without enabling them as collateral to observe how usage evolves for supplies and borrows and to derisk any mechanism design issues that could pose an outsized risk to Aave. Once an asset has sufficient time in the market (O(weeks)), we are comfortable enabling them as collateral as part of the weekly parameter update process, provided there is sufficient liquidity and community buy-in.
We have published an asset listing framework for market risk for Compound, Compound Finance Asset Listing Framework (Market Risk), and will be adapting this for Aave.
We recommend not enabling rETH as collateral on initial listing. The liquidity environment for rETH is similar to low liquidity collateral assets on Aave. Our analysis shows that it would be prudent to first observe how much supply and borrow there is of the asset for a few weeks before enabling it as collateral.
With Aave V3, we would establish borrow and supply caps while listing this asset to limit the exposure of the protocol to this asset. Unfortunately, those don’t exist in V2.
However, if the community still wants to enable rETH as collateral, we would recommend meaningfully more conservative parameters than currently proposed for rETH (which can get tuned over time as part of our dynamic risk management service provided sufficient liquidity):
Comparing rETH to stETH and xSUSHI:
On Ethereum mainnet, there are rETH pools on Curve, Uniswap, Balancer, and Bancor. Here is the breakdown of TVL and trade volume as of 2022-06-30:
Given rETH’s market cap and trading volume, our analysis indicates that more conservative parameters are needed compared to stETH.
Hi @Pauljlei,
Can you please share your thoughts on listing rETH as Collateral with Borrowing Disabled, similar to how stETH listed ? Reading your post, I could be wrong, but it reads like Gauntlet is considering borrowing enabled if rETH was listed.
I am a huge fans of Aave v3 and the new features which allow risk to be better managed.
@Governance_House Our recommendation is to take a conservative approach with regard to enabling an asset as collateral. An asset can always be enabled as collateral, but it is difficult to disable an asset as collateral.
Borrowing rETH is a valuable component of a healthy market. While it is up to the community to decide whether an asset should be borrowable on Aave, there is not much utility to only enable the supply side (i.e., sans collateral enablement) with borrowing disabled. Not enabling stETH as a borrowable asset is due to technical concerns on correctly implementing rebasing assets on Aave rather than on the market risks.
YEs to this! Also this may be of interest to some of your looking to use rETH to extract liquidity in these current market conditions. https://twitter.com/pwndao/status/1565634049078706178. rETH used as collateral on an ERC-20/NFT lending marketplace with no liquidations until the loan expires.