Proposal to add rETH

Governance
#1

Proposal to add rETH

Proposal to add rETH as a capped collateral to Interest Protocol.

Overview

rETH is an ETH liquid staking derivative built on Rocket Pool. Each rETH represents a certain increasing amount of staked ETH. Rocket Pool aims to be more decentralized than Lido, allowing stakers to permissionlessly deposit 16 ETH + 1.6 ETH worth of RPL to run a “minipool” (Lido only allows permissioned operators).

Parameters

Token Address: 0xae78736cd615f374d3085123a210448e74fc6393
LTV: 75%
Liquidation incentive: 10%
Cap: 3k (~$4m)
Oracle Address: 0x1E19CF2D73a72Ef1332C882F20534B6519Be0276
Primary oracle: Balancer rETH-WETH
Secondary oracle: Curve rETH-wstETH OR Uniswap v3 rETH-ETH

Liquidity

MCAP: $142m
Balancer liquidity: $46m
Coingecko 7-day avg 24hr volume: $892k
Notable exchanges: Balancer, Uniswap

Technical risks

  1. Type of contract: liquid staking derivative
  2. Underlying asset: liquid staking derivative
  3. Time: 386 days
  4. Value: control of staked ETH
  5. Privileges:
  • The Rocket Pool rETH contract can mint & burn rETH tokens
  • The Rocket Pool Core Team (and DAO) can change rETH parameters such as Node Operator Fee
  1. Upgradability: None

Volatility Data

rETH has maintained a moderately tight peg to ETH for its history, never moving more than 5% off-peg. Note that rETH’s underlying ETH balance is ~1.04 as the posting of this proposal, which explains rETH’s current peg.

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3 Likes
#2

The rETH market is a little annoying because there isn’t a Chainlink oracle for it, so we need a different primary oracle. Balancer is the logical choice, given the significant liquidity, but we don’t have an oracle wrapper for Balancer yet. We can use the Uniswap v3 market as the anchor.