Thanks for your comments here Signal, it’s clear you’re already deep in the weeds with plug-in development. The team best placed to review the plug-in and answer these questions is Reserves ABC labs. Previously a group have been set up between each teams devs, please let me know if that is required and I can connect you.
Once the plug-in is completed it will need to be audited. Reserve will be happy to send it to Trust security who they have on retainer, a rough timeline is 1-3 weeks + mitigations (if any) then ABC labs will backtest and whitelist it on the UI. You can also opt to choose your own auditor if you prefer.
I noticed you mentioned comission fees but instead prefer to look at on-chain yields. I’ve attached the defillama 30d APYs below, as you can see rETH has the lowest 30d average.
- cbETH, 3.10%
- rETH, 2.58%
- stETH, 2.81%
- superOETH, 4.18%
Current Basket
Collateral Asset | Allocation (%) | Allocation ($) | APY |
---|---|---|---|
superOETH | 33.3% | 4.2m | 4.18% |
cbETH | 33.3% | 4.2m | 3.10% |
stETH | 33.3% | 4.2m | 2.81% |
Blended APY - 3.36%
Diversification Ratio - 0.67
Proposed Basket
Collateral Asset | Allocation (%) | Allocation ($) | APY |
---|---|---|---|
superOETH | 40% | 5.2m | 4.18% |
rETH | 20% | 2.6m | 2.58% |
cbETH | 20% | 2.6m | 3.10% |
stETH | 20% | 2.6m | 2.81% |
Blended APY - 3.37%
Diversification Ratio - 0.74
Rationale
I’m grateful for your prev rationale in the original RFC and think rETH would be a great addition to the collateral basket for the same reasons - 100% permissionless nodes making it the most decentralised LST, the fact that it has deeper liquidity than two of the incumbents; cbETH and wstETH and it’s inclusion will also diversify the collateral basket. It’s also worth highlighting here that Rocket Pool already have a deep alignment with another Yield RToken, ETHplus where it is allocated 21% of the basket (~$50m).
The basket I’ve proposed takes into mind the rational behind adding rETH while also increasing superOETHb to 40% given it’s superior on-chain liquidity from both Aero and Curve pools and it’s superior yield profile at over 1% higher than the rest of the collateral basket assets. The proposed basket also helps us tackle a potential issue we may see in the future with sustained growth of bsdETH since the Coinbase team have deprioritised growing the DEX liquidity of cbETH these last few quarters.
Incentives
I agree that any incentives should be used to prioritise bsdETH growth and as such think that any additional incentives should be added to the bsdETH furnace contract, increasing the yield profile of bsdETH. Using the incentives in this way is two-fold for Rocket Pool since it will help you secure the $2.6m allocation to rETH and will also help grow bsdETH further adding to your TVL and any additional incentives above and beyond the STAR project would always be welcome. Of course i’m open to alternatives here.
More info on how the furnace operates can be found here.