This post aims to advance two closely linked ETHplus workstreams:
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Updating the ETHplus mandate, improving scalability by expanding the range of assets eligible for inclusion in the collateral basket; and
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Codifying a formal ETHplus DTF methodology, in order to align with standards used by newer DTFs such as the CMC20 and LCAP, to establish clear selection principles, rebalancing guidelines, and standardised reporting requirements.
Given the overlap between these workstreams, consolidating them into a single proposal provides the most coherent path forward. Below is the first draft of the ETHplus DTF Methodology. I encourage all governors to review the material, share feedback on what resonates, and highlight areas that require further refinement. Once broad consensus is reached, I propose we progress with formal ratification via an on-chain vote.
Introduction
ETHplus is a safety-first Decentralised Token -Folio, DTF indexed to the ETH staking ecosystem launched in April 2023 on the Reserve Protocol, the largest index protocol.
ETH+ is backed 1:1 by its collateral assets and is permissionlessly mintable and redeemable onchain. It is fully decentralized and governed by Reserve Rights (RSR) stakers who also provide overcollateralization that acts as first loss capital to automatically recollateralize the basket in the event of loss during rebalances.
From inception until now ETHplus mandate has allowed it to provide diversified exposure to the Liquid Staking ecosystem via a basket of the safest and most liquid ETH Liquid Staking Tokens, LSTs available on Ethereum Mainnet and has been able to adapt to changes in market conditions, risk profiles, and fluctuations in onchain liquidity of its underlying assets thanks to its diverse set of active governors. These features have made ETHplus a perfect asset for passive investors who want to supplement their ETH exposure with staking yield.
However, as LST liquidity has deteriorated and ETHplus supply has scaled over the last year, we must now consider updating the ETHplus mandate to include Liquid Restaking Tokens, LRTs to strengthen the DTF’s ability to remain both scalable and risk-adjusted. Incorporating high quality LRTs that meet the safety and liquidity standards of the existing mandate enables ETHplus to benefit from deeper collateral markets, more resilient liquidity profiles, and competitive yields without compromising its safety-first design.
To support this shift, the methodology outlined below introduces a clear set of eligibility requirements and ongoing monitoring guidelines that equip governors to consistently evaluate assets, deliberate on concentration and liquidity risks, and ensure that any LRT exposure added to the basket remains aligned with ETHplus’ core objective of delivering reliable, risk-adjusted ETH yield.
1. Proposed Mandate and Guidelines
1.1 Mandate
Maintain a diversified and risk-adjusted Ethereum-aligned collateral basket composed of the safest and most liquid staking and restaking tokens, positively impacting the Ethereum staking distribution.
1.2 Guidelines for governors to help achieve this mandate
- Curate a basket that seeks safety and liquidity over maximised yield or diversification profiles.
- Where safety and liquidity isn’t compromised, the collateral basket can be optimized for favourable diversification and yield profiles.
- Champion a deeply liquid collateral backing with slippage for minting and redeeming ETHplus less than or equal to 0.5% for sizes up to 20% of total ETHplus supply.
- Champion a diversified collateral basket which opposes concentration. The weight of any single collateral asset in the basket must not exceed 50%, the diversification ratio of the basket must not fall below 60% and the basket may not hold more than 10% of the total TVL of any of its constituent collaterals.
- Ensure a healthy balance between competitive ETH yields and healthy levels of overcollateralization mitigating the potential loss for ETHplus holders during collateral basket rebalances.
1.3 Why was this mandate and these guidelines chosen?
The mandate above aims to centre governance actions around the core pillars of ETHplus, a safety-first, diversified ETH staking index future proofing the scalability of the DTF. Only when the basket satisfies these core pillars can the basket be optimised for competitive ETH yields.
3. Yield Benchmark
The yield benchmark for the ETHplus DTF is to generate yields equal or superior to Ethereum’s leading LST, Lido’s stETH.
4. Revenue Distribution
- 95% passed through to ETHplus holders.
- 5% distributed to RSR stakers for participating in governance and supplying the first loss capital to insure against loss during collateral basket rebalances.
Why was this revenue distribution chosen?
This revenue distribution was chosen at inception and hasn’t been modified since. It ensures ETHplus maintains competitive ETH yields in a crowded ETH staking ecosystem while also providing reassurances to holders that the risk of loss is adequately mitigated.
5. DTF Construction
5.1 Constituent Selection
Only LSTs and LRTs live on Ethereum Mainnet fall inside the selection criteria for ETHplus. With eligibility and weight being based on the ETHplus mandate, an assets market capitalization, onchain liquidity, its risk and yield profiles and the research analysis completed by core contributors including but not exclusive of ABC Labs, the ETHplus DTF Champion and governors.
5.2 Input Data
DeFiLlama has been chosen as the single point of truth for ETHplus in order to reduce confirmation bias. When discussing the yield profile of an asset its 30 day moving average should be used. If the 30 day moving average yield for an asset is unavailable on DeFi Llama the duration of the moving average should be specified and the data source referenced. All gathered data is to be reviewed and cross-referenced by governors to ensure its accuracy and integrity.
5.3 DTF Pricing and the realization of staking yield
ETHplus closely tracks the price of ETH while gradually appreciating against it through the continuous realisation of staking yield from its underlying collateral. This yield is captured directly in the asset’s Net Asset Value, causing ETHplus to accrue value relative to ETH over time. At launch in April 2023, the DTF’s NAV was set at 1 ETH and as of 1st November 2025 sits at 1.06.
5. Reporting and Transparency
In the interests of transparency and supporting governors to make more informed governance decisions the ETHplus DTF champion will submit two reports at the end of each quarter.
The first reports on the general state of ETHplus and aims to provide a comprehensive update of all ETHplus related activities over the quarter, including both on-chain and off-chain data. The purpose of this report is to inform and educate the wider Reserve community on the activities of ETHplus over the last quarter while becoming a reference library for all governance, social media and on-chain metrics.
The second is a report aiming to be not only a comprehensive analysis of both ETHplus minting and redemption curves but also its on-chain liquidity and the liquidity of its constituent collateral assets. The purpose of this report is to inform and educate the wider Reserve community, key stakeholders and institutional capital allocators on key liquidity metrics, and support governance activities over the next quarter.
All reports can be found in the ETHplus Reports tab in the Reserve Protocol Forums.
6. Rebalancing
A proposal to rebalance ETHplus will be submitted to the forums within the first two weeks of each quarter with the selection of constituents being based on the ETHplus mandate and the onchain metrics reported on within the previous quarters quarterly reports.
The proposal will follow the standardised DTF governance schedule. If general consensus is in favour of the collateral basket rebalance, judged by an off-chain poll embedded within the RFC it will graduate to onchain voting. If the off-chain poll is not favourable the rebalance proposal will not progress to an onchain vote.
While these quarterly rebalances ensure a renewed collateral basket each quarter, proposals from the community outside of these planned rebalances are encouraged.
7. What does success look like for this RToken?
A highly liquid yield DTF which can easily be minted, traded, redeemed and used in DeFi protocols across Ethereum Mainnet. The assets growth, at a minimum, tracks the growth of Ethereum’s staking and restaking layers and generates a reliable risk-adjusted yield for both ETHplus holders and its stakers, with the latter not suffering from loss during collateral basket rebalances.
8. Methodology Oversight
The DTF is governed by ETH+RSR holders (ETHplus RSR stakers), who ensure mandate compliance and address issues such as conflicts of interest, methodology changes and DTF cessation. Currently only holders who hold more than 0.01% of the total amount of RSR staked on ETHplus can submit an on-chain proposal and quorum for passing an onchain vote sits at 10%.
The mandate will be reviewed quarterly and updated as required. Any significant changes to the mandate will be ratified via an onchain vote which will follow the standard Reserve Protocol governance flow and will be communicated publicly to holders via the Reserve Protocol Forum and ETHplus X account beforehand.
9. What can ETHplus stakers and the wider RSR community do to ensure success?
- Get involved! Active participation in both forum discussions and governance proposal votes helps to create a fertile community of active governors which other community members and other active market participants will want to be a part of.
- Advocate for ETHplus mandate values and its adoption across other DeFi protocols and with treasury allocators.
- Maintain a keen interest in the Ethereum Staking ecosystem, keeping up-to-date on developing technologies and new liquid staking and staking providers so your decisions and comments in governance are more well informed.
- If time is constrained and you feel you can’t meet the above criteria above to ensure you’re making informed governance decisions consider delegating your voting power to a community delegate who is willing to do so.
10. Risks and Limitations
ETHplus is subject to a range of risks inherent to decentralised, onchain index products.
Although the methodology emphasises safety, liquidity, and diversification, ETHplus remains exposed to smart contract risk, validator and protocol risk associated with its underlying LST and LRT constituents, and systemic risks within the Ethereum staking and restaking ecosystems.
Liquidity conditions can deteriorate rapidly during periods of market stress, potentially increasing slippage during minting, redemption, or rebalancing beyond historical thresholds. The use of governance-defined parameters, quarterly rebalances, and discretionary assessments by governors introduces governance risk, including the possibility of delayed responses to fast-moving market events, imperfect information, or differing risk judgements among participants. The Index relies on third-party sources to gather price data such as DeFiLlama and may be incomplete, delayed, or revised, which could affect yield benchmarking, asset selection, and reporting accuracy. While RSR-backed overcollateralization is designed to mitigate losses during rebalances, it does not eliminate the risk of loss for ETHplus holders in extreme or unprecedented scenarios.
Finally, changes in Ethereum protocol design, staking economics, regulatory developments, or the structure of liquid staking and restaking markets may reduce the effectiveness of the DTF and its methodology over time, requiring future amendments that could impact continuity or performance.
