Author: @Hedged_Adi, DeFi & Partnerships at KelpDAO
Date: 18-12-2024
Summary
We’re proposing to bring rsETH, Kelp DAO’s Liquid Restaking Token and the #2 LRT by adoption, into Fluid’s markets. Fluid is growing into the Liquidity Layer of DeFi, and rsETH aligns perfectly with that vision. By integrating rsETH, we unlock new capital efficiency opportunities for both ecosystems while giving users another high-quality collateral asset to work with.
rsETH is built for Ethereum’s restaking narrative, helping stakers earn rewards while staying liquid. This proposal outlines initial lending pools for rsETH and highlights how both Kelp DAO and Fluid can benefit as we scale together.
Motivation
Kelp DAO’s rsETH is a leading Liquid Restaking Token designed to maximize staking rewards while maintaining liquidity for ETH restakers. As the #2 liquid restaking token with rapidly increasing adoption, integrating rsETH into Fluid would offer:
- New Asset Addition: Diversified collateral options for users on Fluid.
- Mutual Growth: Onboarding rsETH’s growing TVL and user base to Fluid, driving higher liquidity and volume.
- Capital Efficiency: Empower ETH holders to unlock rsETH’s liquidity while participating in Fluid’s lending/borrowing markets.
Since its launch, Kelp DAO has achieved rapid growth and adoption so far:
- Current TVL: ~$2 Billion [~493K ETH]
- Unique Depositors : Growing adoption with ~350k depositors.
- Performance: Proven utility and integrations across several top DeFi protocols including Aave, and other lending markets
- Key lending Market stats: ~$1.2 Bn (320k Eth) supplied on Aave, another ~$50Mn on other mainnet lending markets + ~$30Mn on Layer 2 lending markets
Kelp DAO envisions a future where rsETH serves as a critical asset for DeFi capital efficiency, closely aligning with Fluid’s mission.
Initial Proposed Pools
We propose the following rsETH-based lending and borrowing markets on Fluid:
- rsETH Collateral & wstETH Debt
- Collateral Factor: 94%
- Liquidation Threshold: 96%
- Max Liquidation Limit: 98%
- Liquidation Penalty: 1%
- Withdrawal Gap: 5%
- rsETH-ETH Smart Collateral & wstETH Debt
- Collateral Factor: 94%
- Liquidation Threshold: 96%
- Max Liquidation Limit: 98%
- Liquidation Penalty: 2%
- Withdrawal Gap: 5%
We invite the Instadapp team, DAO, and community to refine these parameters and suggest appropriate lending caps based on risk analysis and utilization projections.
Background
KelpDAO was founded by Amitej G and Dheeraj B, who previously founded Stader Labs, a multichain liquid staking platform with $800Mn+ in TVL.
rsETH Overview
- What is rsETH? rsETH is a Liquid Restaked Token (LRT) issued by Kelp DAO designed to offer liquidity to illiquid assets deposited into restaking platforms, such as EigenLayer. It provides staking rewards, restaking rewards including Eigen incentives and Kelp miles to restakers.
- Key Features:
- Enables restaking rewards and liquidity simultaneously.
- Designed for risk-adjusted yields and composability in DeFi.
Stats
- Liquidity : Has >$63M USD in liquidity with >38M USD on Mainnet across Curve and Balancer
- Key lending Market stats: ~$1.2 Bn (320k Eth) supplied on Aave, another ~$50Mn on other mainnet lending markets + ~$30Mn on Layer 2 lending markets
- Restaked Assets: Over 493k+ ETH restaked by 350k+ depositors since inception.
- Adoption: Ranked #2 among Liquid Restaking Tokens.
- DeFi Integrations: 50+ integrations
- L2 Presence: rsETH is available on 10+ Layer 2 networks, including Arbitrum, Base, Optimism, Blast, Scroll, Mode and more.
Withdrawals
rsETH can be unstaked at any time, subject to the amount in your custody. The withdrawal is fast if the user withdraws as stETH or ETHx with the cycle being between 2-7 days.
For ETH withdrawals, the cycle generally takes 7-14 days, including the 7-day un-bonding period imposed by EigenLayer and the additional time required by Kelp to process withdrawals.
For more details, refer to the Withdrawal Lifecycle.
Security and Audits
- Audits: rsETH smart contracts have been rigorously audited by Code4Arena , Sigma Prime , MixBytes . (Link to Audits)
- Bug Bounty: An active bounty program is live with maximum rewards of $250k - Immunefi (Link to Immunefi bounty)
rsETH Integration in Fluid
- Oracle Support: Chainlink and Redstone oracles ensure accurate rsETH-ETH price feeds.
- Utilization Pathways: With lending, borrowing, and normal / smart collateral use cases, rsETH integration aligns perfectly with Fluid’s goal of capital efficiency.
Benefits to Fluid
- Asset Expansion: Adds a top-performing and fast-growing liquid restaking asset to Fluid.
- Increased TVL and Volume: Drives liquidity inflows and utilization within Fluid markets.
- Mutual Ecosystem Growth: Leverages synergies between Kelp DAO’s user base and Fluid’s platform. Kelp will incentivize users of Kelp’s rsETH on Fluid with Kelp miles and token incentives post TGE.
- Enhanced Capital Efficiency: Empowers users to maximize rsETH utility without compromising liquidity.
Next Steps
- Community discussion and feedback.
- Parameter and risk analysis for proposed pools.
- Integration and launch of rsETH markets on Fluid.
Useful Links
- Kelp DAO Documentation
- rsETH Liquidity Stats
- Smart Contract Audits
- rsETH Token Address on Ethereum: 0xa1290d69c65a6fe4df752f95823fae25cb99e5a7 (Etherscan link)
- Twitter | Discord