Update on wOETH for ETH+
Hi everyone, I wanted to continue this thread since meaningful time for due dilligence has passed since the original RFC and the subsequent IP. After sitting on the forum for more than a year, building the plugin, and completing several additional audits, I am once again proposing a collateral basket change that includes wrapped OETH (wOETH) to the ETH+ collateral basket.
Where things stand
A quick recap for anyone newly following:
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The original RFC was opened in September 2024.
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The follow-up IP was posted in June 2025 and surfaced four substantive concerns from the Reserve/ABC Labs side: concentration, exit liquidity, AMO complexity / mandate fit, and governance / upgradability. We responded to each in the thread and adjusted the proposed allocation to 8% wOETH, comparable to where ETHx started.
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The onchain vote ultimately did not pass. Per my closing comment on that thread, the path forward was for ABC Labs to complete OETH DD, with that work expected to begin in August 2025.
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wOETH was subsequently approved for dgnETH and went onchain in July 2025, establishing internal precedent for OETH passing community DD. dgnETH has since become an Inactive DTF, but onboarding OETH to ETH+ was the original objective
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ETH+ went through a Q1 2026 rebalance in March 2026, which introduced weETH at 22% and cut the combined rETH/sfrxETH allocation from 42% to 20% to address the redemption weakness flagged in the Q4 2025 liquidity report. The diversification ratio improved from 65.5% to 67.5%. Adding wOETH continues that same diversification arc.
On the outstanding DD
The DD scoped on OETH at the time of the IP was expected to start in August 2025; we’re now into April 2026, roughly eight months past that planned start. In the interval, OETH has shipped substantial protocol upgrades (see below), completed multiple new third-party audits, and had onboarded into dgnETH after a full community review. I’d like to use this thread to either close the DD out collaboratively, or to surface what’s still open so it can be addressed before we go onchain again.
Major OETH upgrades since the IP
OETH today is materially different from the version under review at the time of the RFC and IP. The OETH upgrades fall into three buckets, and they all push in the same direction: less trust, more verifiability, and better redemption mechanics.
Merkle proof verification of Beacon Chain balances. OETH is one of the first liquid staking tokens to fully adopt onchain Merkle proof validation of validator balances via EIP-4788, eliminating the oracle/committee dependency that virtually every other LST still relies on. Today only EigenLayer, StakeFish, and OETH use native Merkle proof validation at this layer. Validator state changes that fail proof validation are rejected onchain. Links with more information can be found here: The End of Oracle Dependence and the announcement thread, and an additional write-up by Origin senior engineer of the EIP-4788 mechanics of OETH is here.
0x02 compounding validators with partial withdrawals. OETH staking has migrated to 0x02 compounding validators (EIP-7251), consolidating the validator set from roughly 1,000 sweeping validators to 15 compounding ones. Deposits now accept any amount above 1 ETH (eliminating idle capital that previously had to sit until it reached multiples of 32 ETH), rewards auto-compound at the validator level, and partial withdrawals are supported. This meaningfully improves the redemption flexibility for any DTF holding wOETH. We’ve validated the partial-withdrawal flow end-to-end against a yoETH withdrawal request, see the transaction, which we believe landed around epoch 439347. The full write-up can be found here: Origin Ether Staking Upgrade and the migration announcement. Full migration to 0x02 is expected to complete this quarter.
Front-run protection and a refreshed audit set. The new staking strategy uses a two-step deposit flow with Merkle-proof verification of withdrawal credentials before any large deposit lands, eliminating the standard validator front-running vector. The full upgrade has been independently audited by OpenZeppelin (September 2025), Sigma Prime (September 2025), and Nethermind (October 2025). The complete list of audits is in the Origin audit docs and the security repo. An audit summary thread is also available here.
Nethermind security auditors left a very positive impression of Origin’s documentation, as seen here:
Revisiting the four concerns from the IP
Pulling forward the four concerns from June 2025 and addressing each with where things stand today:
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Concentration / share of OETH TVL. The proposal we took onchain was already at 8%, which is comparable to where ETHx started. With ETH+ supply now at ~35,155 ETH (Q1 2026 quarterly report), the absolute size of any starting allocation is materially smaller than at the time of the IP. We’d be comfortable starting smaller still - a 3,000 ETH starting allocation would put ETH+ at roughly 7.5% of OETH TVL, comfortably inside the <10% guideline Ham articulated in the Q4 liquidity report, and ramping from there using the same two-step pattern that onboarded ETHx.
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Exit liquidity / price impact going out of OETH. The original concern was scoped against the prior Curve pool. Since then the new OETH/ETH Curve pool has gone live and stabilized, and the AMO operates with tighter peg-keeping and better single-sided rebalancing under the current design. On top of DEX exit liquidity, OETH supports async 1:1 redemptions back to ETH at any time, and partial withdrawals via compounding validators give us an additional exit lane that doesn’t rely on any single venue. I’ve added exit liquidity benchmark in the liquidity section below.
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AMO complexity and fit with the ETH+ mandate. The OETH AMO maintains 100% collateralization at all times: protocol-owned OETH only enters circulation when fully backed by ETH delivered into the pool. ETH+ already holds collateral with AMO exposure - sfrxETH operates via Curve AMOs and historically had direct exposure to LRTs (ezETH, pzETH); the OETH AMO is comparatively simpler, with exposure only to ETH and WETH. OETH is also a less-complex version of superOETH, which has been a bsdETH collateral for over a year. On mandate fit: OETH stakes via SSV’s distributed validator technology with two clusters of four nodes across separate geographies, which directly contributes to Ethereum staking decentralization, perfectly within the ETH+ mandate to positively impact the Ethereum staking distribution.
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Governance / upgradability. OETH is controlled 100% by xOGN with a 48-hour timelock (see governance docs). Upgradability has only ever been used to harden the protocol. The recent staking architecture rework is a clear example. Every subsequent upgrade has gone through an independent audit before deployment. Some immutable LST/stablecoin protocols haven’t had the same option when issues have surfaced.
Where OETH helps on liquidity
The Q1 2026 ETH+ quarterly report frames the priority going forward as “rebuilding sustainable, unincentivised liquidity while continuing to expand distribution across DeFi and structured products.” That’s a precise description of what the OETH AMO provides: protocol-controlled depth on the OETH/ETH Curve pool that doesn’t depend on incentive programs or third-party LP behavior. The Q1 rebalance has already partially addressed the rETH/sfrxETH redemption weakness flagged in Q4 2025 by cutting their combined allocation from 42% to 20% and bringing in weETH; wOETH continues that arc with a structurally distinct, non-mercenary liquidity profile.
On peg specifically, OETH currently has the tightest peg-to-ETH of any major LST when exiting via aggregated DEX liquidity. Recent CoW Swap exit rates make this clear:
rETH and ETHx are both already in the ETH+ basket, and both fall off a cliff at size. stETH and eETH are two of the biggest LSTs globally, and OETH still beats them on peg. The protocol-controlled AMO is one of the reasons OETH holds up at this size - depth on the OETH/ETH Curve pool isn’t subject to mercenary LP behavior. For ETH+'s size, that matters.
Next steps
I’d like to use the next few days to surface any remaining DD items or open questions from ABC Labs and/or the Reserve community, then come back with a concrete basket proposal and move to an onchain vote. The basket breakdown is something I’d prefer to align on with the community/DAO here, taking into account the Q1 2026 quarterly report, the Q4 2025 liquidity analysis, and the precedent set by the recent weETH addition.
Happy to walk through the AMO mechanics, the Merkle proof staking architecture, the partial-withdrawal flow, or any specific audit in more depth.
Tagging @ham @pmckelvy @akshatmittal @griffpeer who are often involved in ETH+ rebalances