[RFC] ETHplus Rebalance Proposal Q2 2026

[pete]

Hi @Ham, thanks for the update. A few things before this goes onchain:

@ham

• OETH - I’m grateful to @pete for the thoughtful and ongoing discussion around OETH and acknowledge that the recent reduction in ETHplus supply makes a meaningful allocation more viable than when this discussion began. However, while OETH remains an asset worth monitoring, ETHplus currently underperforms its yield benchmark and OETH does not currently improve that position. As a result, I do not believe inclusion is warranted as part of this rebalance, though it may be worth revisiting in future should its relative yield, liquidity profile or strategic role within the basket change.

The bar for OETH inclusion has been a moving target across this discussion, my RFC, and the IP, but now is resting on yield as the deciding factor?

Currently it appears to be “OETH must close the gap with the stETH benchmark,” which is a tougher standard than the methodology specifies. OETH 30d MA sits at 2.42% vs stETH 2.45% - a 3bps gap would be within normal monthly variation. OETH is still higher yielding than rETH though, so any replacement of rETH with OETH in the basket would increase the ETH+ yields.

However, what you’re forgetting here, is that increased yield is the methodology’s lowest-priority factor. The methodology you ratified states:

@ham

1. Curate a basket that seeks safety and liquidity over maximised yield or diversification profiles.

OETH delivers on both:

• Safety: Your April analysis, which may have been forgotten about, identified OETH’s redemption profile as the strongest in the test set
• Liquidity: The liquidity is clearly there. The liquidity screenshots in my previous response shows OETH handling 12,010 ETH exits at 0.42% slippage, versus rETH at 79.27%, ETHx at 98.40%, and frxETH at 62.77% at the same size

Yield is explicitly listed lower than safety and liquidity. If yield were the primary driver, ETH+ wouldn’t run 50% stETH at 2.45%, it would lean harder into frxETH at the highest yield. OETH is being excluded on the methodology’s lowest-priority factor while delivering on the two highest-priority factors.

I had asked in my previous response for a 5-constituent OETH-inclusive alternative to be modeled alongside the proposed basket so governors could evaluate the trade-offs directly. That modeling wasn’t included in this post.

Governors are being asked to vote without seeing how an OETH-inclusive alternative would actually compare on the metrics that matter. The decision is being made on projected yield differences rather than modeled outcomes. Could you please add a viable comparison basket before the onchain vote that includes OETH, to give governors the data they need? Even a single scenario, such as, stETH 50%, weETH 25%, frxETH 15%, OETH 5%, ETHx 5%, would give governors actual data on yield, redemption capacity, diversification, and dependency trade-offs rather than the projected difference on yield alone.

Poll

• NAY on the current proposal as it stands - OETH inclusion hasn’t been evaluated against a modeled alternative, and the methodology priority places safety and liquidity above yield