Aave

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Title: [ARFC] Onboarding of weETH to Aave v3 on Ethereum Author: Ether.fi & ACI ( Aave Chan Initiative) Date: 2024-02-27

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Summary:

The current ARFC seeks to add Ether.fi Liquid Restaking Token weETH to Aave V3 Ethereum, after the successful TEMP CHECK and TEMP CHECK Snapshot.

The intention behind this initiative is to enhance the diversity of assets on Aave and bolster liquidity within the ecosystem.

Motivation:

eETH is an LRT that allows users to stake their ETH, accrue staking rewards, and receive additional rewards through native restaking on EigenLayer. As of February 3rd, approximately 290,310 ETH ($670M) in TVL has been deposited into the ether.fi 1 protocol, and XX has been natively restaked in EigenLayer.

Ether.fi stands as the pioneering decentralized and non-custodial delegated staking protocol featuring an LRT (eETH). A notable feature of ether.fi is the control it provides stakers over their keys. The team behind the protocol is guided by the following principles:

1. Decentralization is the foremost objective. Ether.fi is unwavering in its commitment to maintain the protocol’s non-custodial and decentralized nature, ensuring that stakers always have control over their ETH.
2. Ether.fi operates as a legitimate business with a sustainable revenue model, with the team dedicated to its long-term success. There is no place for deceptive or unsustainable financial practices.
3. Ether.fi is committed to always acting in the best interest of the Ethereum community. In the event of any missteps, the team at ether.fi will take responsibility and swiftly rectify the situation.

Risks:

ether.fi’s LRT eETH is 100% redeemable. Users who deposit ETH into the protocol can withdraw their stake at any time. The holdings are publicly auditable on-chain and the protocol retains healthy reserves to offset any losses.

Proof of Liquidity and Deposit Commitments:

Anyone who deposits weETH into Aave will accumulate ether.fi  and EigenLayer points to be used for future incentives.

Users are given eETH on a 1:1 basis with a minimum deposit of 0.001 ETH.

ether.fi is also the first LSP to natively restake on EigenLayer — 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 (weETH) to various platforms.

Specification

Risk Parameters

weETH: 0xCd5fE23C85820F7B72D0926FC9b05b43E359b7ee

Risk Parameters	Value
Isolation Mode	No
Borrowable	Yes
Collateral Enabled	Yes
Supply Cap (weETH)	8000
Borrow Cap (weETH)	800
Debt Ceiling	-
LTV	72.50%
LT	75.00%
Liquidation Bonus	7.50%
Liquidation Protocol Fee	10.00%
Variable Base	0.0%
Variable Slope1	7.00%
Variable Slope2	300.00%
Uoptimal	45.00%
Reserve Factor	15.00%
Stable Borrowing	Disabled
Flashloanable	Yes
Siloed Borrowing	No
Borrowed in Isolation	No
E-Mode Category	ETH-correlated

Useful Links

Ether.fi

TEMP CHECK

TEMP CHECK Snapshot

Disclaimer

This proposal is powered by Skywards. The Aave Chan Initiative is not directly affiliated with Ether.fi and did not receive compensation for creation this proposal. The co-author is a team member Ether.fi

Next Steps

1. If consensus is reached on this [ARFC], escalate this proposal to the Snapshot stage.
2. If the ARFC snapshot outcome is YAE, publish an AIP vote for final confirmation and enforcement of the proposal
3. Copyright: Copyright and related rights waived via CC0.