Proposal: Support weETHs collateral on Venus on ETH Mainnet
Summary
ether.fi is seeking community support for adding its Liquid Restaking Tokens (weETHs) to Venus Protocol on ETH Mainnet. In addition, anyone who deposits weETHs on Venus will accumulate ETH staking rewards alongside ether.fi and Symbiotic points to be used for future incentives.
The Super Symbiotic LRT is intended to provide ether.fi customers an easy onboarding into the Symbiotic ecosystem. Symbiotic is a shared security protocol that serves as a thin coordination layer, empowering network builders to control and adapt their own (re)staking implementation in a permissionless manner. Unlike other LRTs, users have numerous deposit options including WETH, eETH, weETH, wstETH, cbETH, bETH, rETH, mETH, swETH, etc. These assets will be directly restaked on Symbiotic each time the deposit caps are raised.
Rationale:
weETHs is an LRT that allows users to stake their ETH, accrue staking rewards, and receive additional rewards through native restaking on Symbiotic. As of July 26th, approximately 2,026,755 ETH ($6.4B) in TVL has been deposited into the ether.fi protocol with 140,000 ETH ($450M) dedicated to the weETHs symbiotic vault. You can view additional ether.fi stats on Dune.
Users are given weETHs on a 1:1 basis with their deposit into the Symbiotic vault. As mentioned above, ether.fi is also the first LSP to natively restake on EigenLayer, Symbiotic, and Karak — a move that helps improve network efficiency and provides stakers with additional rewards for their network contributions. ether.fi has also launched a series of partnerships with DeFi protocols to incentivize users and drive liquidity (weETHs) to various platforms.
ether.fi is the first decentralized, non-custodial delegated staking protocol with an LRT (eETH). One of the distinguishing characteristics of ether.fi is that stakers control their keys. Those who work on the protocol strive for the following:
- Decentralization is the primary objective. ether.fi will never compromise on the non-custodial and decentralized nature of the protocol. Stakers must maintain control of their ETH.
- The ether.fi protocol is a real business with a sustainable revenue model. The team is in this for the long haul. No ponzinomics f*ckery.
- ether.fi will do the right thing for the Ethereum community, always. If and when the team messes up, ether.fi will own it and course correct quickly.
Key benefits brought by the Symbiotic protocol:
- Flexibility through ModularityNetworks control all aspects of their (re)staking implementation, including collateral assets supported, node operator selection mechanics, rewards, slashing, and associated resolving mechanisms. All participants can flexibly opt in and out of shared security arrangements coordinated through Symbiotic.
- Risk Minimization through ImmutabilityNon-upgradeable core contracts on Ethereum remove external governance risks and single points of failure. Our simple yet flexible contract design minimizes execution layer risks.
- Capital Efficiency through Restaked Collateral and Reputation-Based CurationA permissionless, multi-asset, and network-agnostic design enables scalable and capital-efficient sourcing of economic security. An evolving operator-centric cross-network reputation system will further enhance capital efficiency for network builders.
The ether.fi team will bootstrap the pool with $25,000 worth of weETHs and include the weETHs Venus market as an integration partner to kickstart the market on Venus.
Motivation
This move is intended to improve asset diversity on Venus and increase liquidity in the ecosystem. By integrating weETHs into their markets, Venus Protocols allows its users to participate in providing economic security to differing assets, support diversity in the restaking landscape, and earn incentives in addition to lending APY on their holdings.
Audits
Conclusion
Adding support for weETHs allows Venus to be a first-mover in capturing the restaking market outside of the EigenLayer ecosystem, hosting a more diverse set of economic security. This also provides users with a wider range of opportunities to gain restaking exposure that match exceeding demand for LRTs.