Liquid Staking RFP

Elected Representatives 💼
1

Introduction

The Optimism Collective currently holds ~21.5K ETH in its treasury. ETH is not just a reserve asset; it is a strategic tool for strengthening Optimism and the broader Collective. This RFP sets out a framework for how ETH may be allocated and invites proposals from the community.

This process is experimental, and the treasury management framework may be refined as we learn.

Goals

We want to put ETH to work across the OP Mainnet ecosystem. Our objectives are to:

  • Generate sustainable yield for the Optimism Collective.

  • Deepen liquidity and improve capital efficiency on Optimism Mainnet.

  • Strengthen on-chain activity on OP Mainnet.

  • Ensure benefits accrue back to the Optimism Collective and its mission.

Proposal

The Optimism Collective currently holds approximately 21.5K ETH in its treasury. Of this, 5.4K ETH will remain in reserves. We propose allocating the remaining 16.1K ETH as follows.

  • Institutional Staking - 60% native staking on ETH Mainnet - already approved by governance

  • Liquid Staking - 40% liquid staking on OP Mainnet. - the subject of this RFP.

We invite proposals that enable and/or improve liquid ETH staking on OP Mainnet.

Submission Requirements

Proposals must answer the following question:

  • Overview – What is your proposal and what benefit does it bring to the Optimism Ecosystem?

  • Design – Provide an overview of your system architecture and security.

  • Risks & Mitigation – Provide an overview of the following.

    • Smart Contract Audit

    • Governance

    • Collateral & Financial Performance

      • What is the amount of assets secured by your protocol on Optimism Mainnet?

      • What is the amount of assets secured by your protocol overall across EVM blockchains?

      • Have there been any significant de-pegging events in the past 12 months?

    • Process for technical upgrades

    • Liquidity risks - how do you recommend mitigating liquidity risks? (i.e. slippage)

    • Regulatory risks

  • Yield / Fees

    • What is your historical yield? What yield do you project, if any?

    • What are your fees / commissions?

  • Strategic Benefits

    • In addition to the Collective ETH (6.4K) in this proposal, how do you plan to grow OP Mainnet ecosystem around your LST (e.g., DEX liquidity, DeFi use cases)

    • What other economic benefits are there for OP Mainnet and the Superchain ecosystem?

  • Security: Provide an overview of your security posture including:

    • Summarize results of all third-party security audits, including auditor names, dates, scope and keyfindings / remediation status. Provide links to public reports where available.

    • Outline your bug bounty program, including historical data on reported issues or paid bounties.

    • Describe your system’s upgrade process, including who can propose and execute upgrades, how decisions are made, and any existing veto or emergency powers.

    • Detail the client software implementations that support your system, including the number of independent clients, and measures taken to ensure resilience.

  • Transparency & Reporting

    • How do you plan to provide reporting on staking performance and general success criteria?

    • What dashboards and tools can the community use to monitor performance?

  • Roadmap

    • What timeline will it take to deploy your proposal?

    • What are the major milestones?

    • What treasury operations approach for deploying the Collective ETH to your LST?

    • What are the success metrics?

  • Team

    • Who are the founders of this project?

    • What experience and track record does your team bring?

Evaluation Criteria

Proposals will be assessed based on, among other things:

  • Strategic Impact – ecosystem benefit, yield, partner alignment.

  • Risk Profile – principal, technical, counterparty, legal, reputational.

  • Transparency & Reporting – clarity of monitoring and oversight (emphasis for on chain activity & reporting)

Risk Adjusted Return Score = Benefit / Risk

The Risk-Adjusted Score provides a simple measure of how effectively each proposal balances potential benefit against associated risk. It is calculated as the ratio of Benefit to Risk. The Benefit component captures tangible and qualitative upside — including Liquidity, Yield, and Ecosystem Benefits (0-5) reflecting strategic alignment and expected ecosystem impact. The Risk component reflects downside exposure through a Risk Score (0–5), which evaluates the likelihood of capital loss or adverse outcomes.

A higher Risk-Adjusted Score indicates a more favorable balance between return and risk, helping prioritize proposals that offer strong net value to the Collective.

Table
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Risk Adjusted Score = (Liquidity + Net Yield + Ecosystem Benefit) / Risk

Technical Requirements

Priority will be given to projects that demonstrate a robust and proven security posture, including (but not limited to) the following characteristics:

  • Formally Verified Code

  • Multiple high-quality security audits from reputable third-party firms, with all critical findings remediated.

  • A live bug bounty program with a documented history of reported vulnerabilities and payouts.

  • Clear, transparent slashing and missed-reward criteria, with no recorded slashing incidents to date.

  • At least 12 months of continuous mainnet operation without major security incidents or core code exploits.

Submission Process

  • Submission Window: Nov 7, 2025

  • Review & Feedback Nov 21, 2025

  • Final Approval: Dec 5, 2025

Decision Making & Communication

  • Budget Board to review & approve Risk Thresholds & Evaluation Framework

  • Foundation & Labs teams to evaluate submissions and put forward recommendation

  • Budget Board to approve final recommendation.

  • How results are communicated: Decisions will be published publicly, with rationale and expected outcomes.

  • Monitoring: ETH allocations reviewed against milestones; yield/incentives flow back to the treasury.

Note: Submission does not guarantee selection. Foundation, Labs & Budget Board may choose or reject any submission for any reason in their sole discretion

Important Note on ETH Deployment

  • Foundation will custody the ETH, which will be administered by a 3rd party.

  • Protocols are custodians/operators, not recipients of grants.

  • ETH can be withdrawn, reallocated, or redeployed by Foundation with notification to the community.

  • Any yield, incentives, or fees must accrue back to the Collective treasury.

7 Likes
2

Confirming that this is the draft proposal from the budget board.

7 Likes
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As a quick introduction, while I am unable to directly comment from the perspective or as a representative any of the major lending protocols, I am a mid-size (~8 figures) lender/staker across a number of lending and staking protocols. With this in mind, I apologize if this may not be the correct venue and if this proposal is strictly to consider deployment through liquid staking.

As stated, the goal of the RFP is to strengthen the Optimism ecosystem rather than ETH’s consensus, and that said I would propose to widen the scope of the RFP to include a significant simple lending portion through Optimism’s major lending protocols.

Doing so addresses the goals mentioned in a more appropriate way than simple liquid staking in the following ways:

  • Generate sustainable yield for the Optimism Collective.

    • Liquid Staking: Average yield of 2.66% across major OP staking protocols (weETH, rETH, cbETH)
    • Lending: Average yield of 2.62% across major lending protocols (Aave) (-0.04% annually when compared to staking)

  • Deepen liquidity and improve capital efficiency on Optimism Mainnet.

    • Liquid Staking: Does little to nothing to improve capital efficiency
    • Lending: Lending ETH leads to more competitive borrowing rates that deepen liquidity in a number of ways (e.g. lowered leverage trading costs, more at market ETH liquidity, significantly more attractive looped staking opportunities)

  • Strengthen on-chain activity on OP Mainnet.

    • Liquid Staking: Liquid staking would serve to strengthen the staking protocols that have chosen to align with Optimism and expended their own resources to do so (though usually exclusively through committing liquidity for their own products)
    • Lending: Lending ETH not only does the above (likely at a .94:1 rate) through attracting looped stakers, but also strengthens the number of other products that rely on lending/borrowing – whether through borrowing the ETH directly, or borrowing collateral that is attracted by low ETH borrowing costs.

  • Ensure benefits accrue back to the Optimism Collective and its mission.

    • Liquid Staking: The primary benefit is a highly sustainable yield and “number go up” for TVL metrics.
    • Lending: The benefits includes the above, however at the cost of minimal (~.04%-.4% APY) the ecosystem receives real (potentially sticky) users that interact with the liquidity provided, while deepening core asset liquidity and in a best case scenario feeding a small feedback loop.

Again, apologies if this is not the correct venue, and to conclude, my proposal would be to widen the scope of the RFP to include lending protocols (Aave) and invite their RFP (though it may not cleanly fit in all the RFP submission requirements)

4

Thanks for your thoughtful response, we’re excited to see community interest!

This proposal is an early step towards effective treasury management for the Collective. For now, governance is only exploring staking of the sequencer ETH, but we anticipate a broader scope in the near future.

5

Treehouse Liquid Staking Proposal For The Optimism Collective

Submitted by: Treehouse
Contact: team@treehouse.finance | https://app.treehouse.finance/

1. Overview

Treehouse and tETH

At Treehouse, we are building the infrastructure that will empower the fixed income market to flourish in the digital asset space. Our vision is to drive the next wave of DeFi innovation, where fixed income products become foundational primitives. Given the scale of traditional fixed income markets, we see a significant opportunity to attract both retail and institutional participants to the digital asset market.

tETH, one of Treehouse’s offerings, is an innovative Liquid Staking Token (LST) with an embedded arbitrage strategy, also known as ‘LST 2.0’. Users deposit ETH to earn real yield through 1) staking rewards; 2) Market Efficiency Yield through onchain interest rate arbitrage, and 3) Additional incentives via Treehouse’s GoNuts Season 2 program.

Treehouse currently hold more than $400M in TVL, with the majority being on Ethereum. In addition, tETH has also achieved strong traction across chains through Chainlink’s CCIP, and is now bridgeable to Arbitrum, Base, Avalanche, and TAC.

In the past one year, tETH has generated 3.43% APR, compared to 2.95% APR from Lido’s stETH in the same period.. On average, tETH generates 30-80 bps on top of Lido’s stETH on a annualized daily basis.

Benefits to the Optimism Ecosystem

  • Sustainable real ETH staking yield flowing back to OP Collective

  • A liquid, composable asset suitable for onchain activity

  • Enables borrowing, leverage staking, LP strategies, and other DeFi use cases

Treehouse’s Commitments

  • Enable tETH bridging to OP Mainnet through Chainlink’s CCIP techstack with secondary market liquidity seeded on day 1

  • Establish necessary DeFi integrations with existing protocols on OP Mainnet

  • Provide transparent performance reporting with on-chain data

2. Design

ETH can be deposited into tETH through the Treehouse router contract (Treehouse: tETH Router | Address: 0xefa3fa8e…6c90628f5 | Etherscan) on Ethereum which is then staked and wrapped on Lido to wstETH before sending to the vault.

In return, the contract mints the necessary amount of tETH as the receipt token for the deposits that represents your share of the vault.

Then, the wstETH deposited into the vault will be allocated to sub-accounts that are running the strategies on specific lending protocols, e.g. Aave, and perform the arbitrage strategy accordingly.

The tETH vault does accounting on a daily basis which mints or burns Treehouse’s wstETH internal accounting units (IAUs) depending on the profit of that day. Once accounting is done, the vault updates the exchange rate between tETH and wstETH, effectively accruing the profit to the vault.

3. Risks & Mitigation

Smart Contract Security

Governance

  • Protocol changes require onchain governance, voted on by holders of TREE and Treehouse Squirrel Council NFTs on Snapshot: Treehouse DAO

Collateral & Financial Performance

  • Treehouse currently has roughly 400M in TVL, across Ethereum, Arbitrum, Base, Mantle, and TAC
  • In the past one year, tETH has generated 3.43% APR where Lido’s stETH yielded 2.95% in the same period
  • Specific statistics on the Treehouse ecosystem can be seen on our official Dune Dashboard: Treehouse One-Stop Dashboard

De-Peg Risk

  • tETH has maintained high liquidity with its peg to wstETH (the underlying asset) with onchain liquidity pools maintained across Curve, Balancer, and EulerSwap. Since inception, tETH had no significant depeg from its fundamental value.
  • While tETH can be swapped in and out of position on secondary markets, direct redemption can be facilitated on Ethereum to the underlying asset through the Treehouse dApp. Users can either
    • Perform a normal redemption provided that the size is above 200 wstETH worth of tETH where we unwind the wstETH staked from Lido and repay the debts on the underlying strategies to release the necessary collaterals to the users, or
    • Perform a fastlane redemption for the underlying wstETH where we use the wstETH earmarked as a part of the strategy to facilitate instant redemption and pay a 2% fee. The Treehouse team will then rebalance the portfolio through Lido unstaking to ensure proper leverage is restored to the strategy.

Technical Upgrades

  • All ownable contracts are secured with a 5/7 multi-sig. Only the tETH contract is upgradable for future expansion plans.
  • Any changes to the smart contract are subject to a 5-day timelock, except for the blacklisting functions to allow for any security-related actions to be performed swiftly.

Liquidity & Slippage

  • Treehouse will provide direct liqudity to OP Mainnet for retail users of tETH on OP
  • For sizable redemptions, Chainlink will facilitate the CCIP bridge back to Ethereum for deeper liquidity and the two aforementioned direct redemption methods.

Regulatory Risks

  • Treehouse manages the entirety of the strategy on-chain with verifiable smart contracts with no CeFi exposures

4. Yield / Fees

  • Historical staking yield
    • 3.43% in the last 12 months
  • Projected yield based on current validator performance
    • 30-80 bps on top of Lido’s wstETH
  • Validator commission or protocol fee
    • 20% of the yield Treehouse generates on top of wstETH
  • Any additional fees (redemption, withdrawal, etc.)
    • 0.05% fee for normal redemption to cover for the loss of yield in the strategy during the redemption period
    • 2% fee for fastlane redemption for instant liquidity

5. Strategic Benefits

  1. Treehouse will seed initial DEX liquidity pools for direct accessibility of tETH on OP Mainnet
  2. Treehouse will work with the relevant partners to list tETH as collateral on lending markets, enabling additional strategies to be run on top of tETH on OP Mainnet
  3. Treehouse will explore cross-chain strategies to bring the underlying tETH strategies to OP Mainnet

6. Security

Audits

Bug Bounty

Upgrade Process

  • Who can propose upgrades?
    • Upgrades to the contract will be done through the aforementioned multi-sig
  • Governance checks
    • All important decisions on protocol growth and changes in parameters will be voted by the DAO through Snapshot
  • Emergency pause process
    • tETH maintains a blacklist function which may pause movements of funds in emergency scenarios

7. Transparency & Reporting

  • All tETH fund movements are tracable completely onchain. Below are the vault and individual strategy addresses on Ethereum:
    • Vault: 0x551d155760ae96050439AD24Ae98A96c765d761B
    • Strategy0 - Aave Core: 0x60d2D94aCB969CA54e781007eE89F04c1A2e5943
    • Strategy1 - Spark: 0x5aE0e44DE96885702bD99A6914751C952d284938
    • Strategy2 - Aave Prime: 0xB27D688Ac06a441c005657971B11521e80CdcE98
    • Strategy3 - Gearbox: 0xbfdF0aF6Df48E645Bd076802B95DDEf0b1E02a9d

Community Tools

8. Deployment Roadmap

Milestone Timeline Details
Proposal Approval Dec 5, 2025
tETH Bridgeable to OP Dec, 2025 CCIP contracts live for tETH on OP
Liquidity rollout Jan, 2026 Seed liquidity for tETH-wstETH pool on DEXs
OP Marketing Campaign Feb, 2026 A marketing campaign targeted for tETH on OP Mainnet
DeFi Integrations H1, 2026
Explore tETH strategy deployment on OP Mainnet H1, 2026

Success Metrics

  • TVL Bridged to OP Mainnet
  • tETH unique wallet holders on OP Mainnet
  • Sustainable and safe yield generated for the Collective’s Treasury
  • Number of DeFi integrations

9. Team

  • Brandon Goh
    • CEO
    • Former Morgan Stanley Credit Derivatives and Wells Fargo ABS Trading
  • Bryan Goh
    • COO
    • Serial entrepreneur with multiple successful exits
  • Ben Loh
    • CSO
    • Former Revolut crypto product and BNP Paribas investment banking

10. Conclusion

Treehouse is pleased to formally submit this proposal to the OP Collective as part of the Liquid Staking RFP. We believe tETH can serve as a secure, yield-generating liquid staking primitive native to OP Mainnet, deepening liquidity, expanding DeFi utility, and directing sustainable ETH rewards back to the Collective treasury. We welcome feedback from the community, Budget Board, Foundation, and ecosystem partners, and are happy to clarify any part of the proposal or incorporate suggestions.

6

Lido Liquid Staking Proposal

Submitted by: Willem (contributor to the Lido Ecosystem Foundation)

Overview

This proposal suggests that the Optimism Collective stakes the full amount covered by this RFP (40% of 16.1k ETH) into wstETH on OP Mainnet, using Lido Core. Lido wstETH is the premier liquid staking solution and has been live on Ethereum Mainnet since 2020, and on OP Mainnet for >3 years. During that time, Lido wstETH has been widely integrated into the Optimism DeFi ecosystem (both on OP Mainnet and on the wider Superchain) and has seen overall growth in terms of usage and TVL on these chains.

By staking the Optimism Collective’s ETH with Lido, the community will be using the most robust, battle-tested liquid staking infrastructure with a diverse node operator set - as well as supporting an early contributor to the Optimism DeFi ecosystem.

If the Optimism Collective decides to stake the Liquid Staking portion of the treasury exclusively with Lido, then a reward share on the Lido DAO fee can be offered on top of the net staking yield (details outlined below).

Design

The Lido protocol is a liquid staking solution where the protocol batches user deposits to the Ethereum staking contract in order to stake across a wide selection of (over 600) node operators. Depositors receive stETH, a receipt token which represents their staked ETH and rebases to reflect staking rewards (and/or penalties). wstETH is a wrapped, non-rebasing version of stETH; rewards accrue via an increasing wstETH:stETH exchange rate rather than balance rebases.

The protocol currently has three different staking modules:

  • Curated Module: The Curated Module is the origin of the protocol, the first and currently largest Staking Module. It consists of allow-listed independent professional staking organizations and Ethereum client teams (37 in total), which operate validators for the protocol.
  • Community Staking Module: The CSM module has permissionless entry, allowing any node operator — and especially community stakers, from solo stakers, to groups of friends, to amateur operators — to operate validators. Currently 489 community stakers are running validators, and the CSM is the fastest growing module in the protocol.
  • Simple DVT: The Simple DVT Module facilitates the battle-testing of Distributed Validator Technology (DVT) on the Ethereum Mainnet, utilizing both Obol and SSV Network implementations. It currently consists of 82 operating clusters.

Each quarter, a full overview of node-operator statistics across modules is published, including client, infrastructure, and geographic distribution. The goal is to create a resilient staking operation that is not overly reliant on a single client software, piece of infrastructure, or a certain geographical/jurisdictional area. These reports can be found here. Besides the number of node operators mentioned above, some of the highlights from the latest quarter include:

  • Consensus-layer client diversity: Lighthouse ~25.81%; Vouch ~22.85%; Teku ~21.52%; Prysm ~16.20%; Nimbus ~10.46%.
  • Execution-layer client diversity: Nethermind ~39.06%; Geth ~37.35%; Besu ~19.71%; Reth ~3.36%.

Breakdowns of the infrastructure running the Curated, Community Staking, and Simple DVT staking modules can be found in the above report, as well as geographical and jurisdictional dispersion.

For more information on the design please see the above links for the staking modules as well as the general documentation here.

Security, Risks & Mitigation

All Lido deployments follow a fully transparent and security-first development process: all components are open sourced, undergo multiple independent audits, fuzzing, invariant checks, and selective formal verification of critical code paths. Public testnets are used to simulate real-world conditions and expose edge cases. The primary objective is to maintain core safety properties—most importantly, to keep stakers safe.

Audits

Each protocol upgrade goes through the security process outlined above. Multiple independent auditors are used, including Certora, StateMind, Hexens, ChainSecurity, Oxorio, MixBytes, SigmaPrime, and Quantstamp. In total, different aspects of the protocol have been audited 78 times - please find a full list of all audits here or on Github. All these reports are publicly available and key findings and remediation status can be found within them.

Bug Bounty Programme

A bug bounty programme on Immunefi is in place that has been live since May 2021. The bug bounty programme covers Lido smart contracts and applications, with a focus on preventing loss of user funds, some types of denial of service attacks, governance hijacks, data breaches, and data leaks.

Rewards are distributed according to the impact of the vulnerability based on the Immunefi Vulnerability Severity Classification System V2.3. This is a simplified 4-level scale, with separate scales for websites/apps and smart contracts/blockchains, encompassing everything from consequence of exploitation to privilege required to likelihood of a successful exploit.

Governance

Lido DAO is governed by LDO holders through a regular process that relies on established frameworks and voting platforms approved by the community — and is safeguarded by stETH holders through the Dual Governance system.

Governance follows a 5 step process:

1: Discussion on the Research Forum. The first step is publishing an idea or a proposal on the Research forum and gathering community feedback. There must be at least 7 days between the initial post and the next steps. An idea can move forward once the proposal is welcomed and feedback is addressed.

2: Off-chain voting. The next step is off-chain voting on Snapshot.To pass, a proposal requires the winning option to receive both a minimum of 5% of total LDO token supply and a simple majority of all participating tokens.

3: On-chain voting. After the off-chain vote, the proposal moves to the on-chain one. Lido DAO uses the Aragon framework for on-chain governance. It can perform different operations, including smart contract updates and fund transfers. To pass, a proposal requires the “yes” option to receive both a minimum of 5% of total LDO token supply and a simple majority of all participating tokens.

On-chain voting lasts 5 days and has two phases: 1) The main phase: a 3‑day (72‑hour) period of conventional voting, when participants can vote “Yes” or “No”. 2) The objection phase: a 2‑day (48‑hour) period when participants can vote “No” or change their vote from “Yes” to “No”.

4: Dual governance. After a successful vote (i.e. a vote where the “for” option has gathered sufficient voting power), on-chain actions targeting Lido on the Ethereum protocol enter Dual Governance — a dynamic timelock that allows stETH holders to extend execution delay based on the level of opposition, and in certain cases invoke Rage Quit, allowing them to withdraw from the protocol before the results of the vote in question would take effect.

Each proposal faces a minimum 3-day delay, giving stETH holders time to evaluate the proposals. If stETH holders raise no objections, the proposal is scheduled and becomes available for execution in 24 hours.

Depending on the amount of stETH in opposition, the governance system enters different states.The main states are:

  • Veto Signalling. This is activated with >1% of the total stETH supply in the signaling escrow. This blocks governance motions for 5 to 45 days, depending on the amount of opposing tokens. This provides time for negotiation between LDO and stETH holders.

  • Rage Quit. This is triggered when >10% of the total stETH supply is locked in the signaling escrow. Governance stays paused until opposing stakers exit the protocol.

5: Enactment. If LDO token holders approve a proposal and stETH holders don’t object to it via Dual Governance, then the last step is the enactment and execution of the proposal.

Collateral & Financial Performance

At the time of writing, there is a total of 24,632 wstETH (~30k stETH) on Optimism Mainnet. On the wider Superchain, there is a total of 79,221 wstETH (~96.5k stETH). Finally, as a whole, a total of 8,587,616 ETH is currently staked with Lido.

There have been no significant recent depegging events. (w)stETH is always fully redeemable 1:1 to ETH via the withdrawal queue.

Process for technical upgrades

Each technical upgrade has to go through the governance outlined above. Before starting this process, contract upgrades go through multiple independent audits as well as other security practices where needed (fuzzing, formal verification, invariant checks, et cetera). All Lido contracts are fully open sourced as well, giving external actors the chance to review contracts before they are deployed.

After these security procedures, a contract will not be enacted unless 1) LDO holders vote in favour of it (off-chain and on-chain), and 2) stETH holders don’t voice their opposition to the upgrade through the Dual Governance system.

Liquidity risks

(w)stETH is one of the most liquid tokens in DeFi with >$400M of liquidity reserves (i.e. the value of paired assets against (w)stETH). It is also listed on centralized exchanges, which deepens this overall liquidity profile.

Liquidity risks can be fully mitigated by using the protocol staking and withdrawal queue - this way a 1:1 stETH:ETH ratio can be guaranteed. It is recommended that the Optimism Collective uses these queues to avoid slippage altogether.

Regulatory risks

Lido is a Decentralised Autonomous Organisation (DAO) that is comprised of a set of smart contracts immutably stored at and openly accessible on a specific set of public addresses on the Ethereum blockchain. The DAO manages the liquid staking protocol by deciding on key parameters and contract changes through the voting power of governance token (LDO) holders. As such there is no centralized entity that can unilaterally change or upgrade the core contracts that govern staking and the (w)stETH token as a whole.

Yield & Fees

The yield on (w)stETH follows the general ETH staking yield that is composed of consensus (e.g. attestations and block proposals) and execution (e.g. priority fees and MEV) rewards. At the time of writing the net yield on (w)stETH is 2.6% annually.

A 10% fee is applied on staking rewards. This fee is split between node operators and the Lido DAO. That means the users receive 90% of the staking rewards returned by the validators.

Strategic Benefits

OP Mainnet and the Superchain as a whole have historically been strongly supported by the protocol, and wstETH continues to be an important asset in the DeFi ecosystems on these chains. A quick overview of the wstETH DeFi ecosystem on OP Mainnet:

  • wstETH is the largest collateral asset on Aave
  • wstETH is listed on other lending markets such as Compound, Alchemix, Moonwell, and Morpho
  • wstETH has liquidity pools on multiple DEXes, including Velodrome and Uniswap

Lido contributors continue to foster these integrations and work on expanding wstETH’s role in the OP Mainnet DeFi ecosystem.

On top of that, wstETH is also widely available on the Superchain, including on Base, Unichain, Soneium, Mode, Swellchain, Lisk and Ink. The expectation is that this list will continue to expand and that more chains will have wstETH support in the future.

Finally, with the recent introduction of Lido Earn, there are now Lido DeFi vaults where users can deposit their (w)stETH and get exposure to DeFi protocols and yields on various chains. OP Mainnet and the Superchain chains are supported as integrations and so curators of these vaults will help boost usage and TVL through capital deployments.

Reward Share programme

If the Optimism Collective decides to stake the Liquid Staking portion of the treasury exclusively with Lido, then a reward share can be offered on the Lido DAO fee (the 5% fee on staking rewards). This reward share amounts to 1% of the gross yield, i.e. 20% of the current Lido DAO fees. This effectively lowers the staking fees from 10% to 9% on the wstETH held in the Optimism Collective treasury. These reward share payments which will be distributed on a quarterly basis to an address designated by the Optimism Collective.

Transparency & Reporting

Transparency is one of the key values of Lido DAO, and is enshrined in how the protocol operates and the resources made available to the public by contributors. As such, all information related to staking performance can be found publicly online. Some key resources include:

Roadmap

There is no timeline for a deployment - the contracts have been live for years and are fully ready for the Optimism Collective to stake their ETH.

In terms of treasury operations, and in order to avoid slippage altogether, it is suggested that the Optimism Collective stakes the ETH to wstETH on Ethereum Mainnet and then bridges wstETH over to OP Mainnet. This way a ratio of 1:1 ETH:stETH can be guaranteed.

Alternatively, the Optimism Collective could make use of the Chainlink CCIP Direct Staking module, which is live on Optimism Mainnet as well. Direct Staking abstracts away the bridging and staking actions and from a user’s perspective this allows for staking of ETH into wstETH directly on Optimism Mainnet. Note that there is a small CCIP fee (7 bps) for wETH bridging to Ethereum Mainnet.

Lido contributors are willing to support and provide guidance for these treasury operations to ensure a rapid turnaround.

Appendix: A note on stVaults and Institutional Staking

While not part of the current RFP scope, there has been a development that might be of interest to the Optimism Collective for the institutional staking part of the treasury. Through stVaults, slated to be launched in December 2025 as the headline component of Lido V3, there is an opportunity to earn outsized staking rewards on this portion of the treasury while having the flexibility to choose node operators and staking parameters.

In a nutshell, stVaults are introduced with Lido V3, a modular innovation that adds flexibility to Lido on Ethereum by enabling customizable staking setups, allowing users to select Node Operators and validation infrastructure. Stakers can take advantage of stETH’s liquidity, security, and integrations by tailoring Ethereum staking strategies to meet their needs and optimize rewards based on priorities.

The Optimism Collective could evaluate stVaults as an alternative for the current custodial deployments. This way the Optimism Collective can directly support the decentralization of the overall Ethereum network by selecting client teams or node operators utilizing minority consensus and execution layer clients in underrepresented geographies, helping to promote overall client diversity.

Another key differentiator with liquid staking is that minting stETH is optional for stVaults. The Optimism Collective can choose their own operator(s), parameters, and then decide if minting stETH is desired. If minting stETH is not required then the costs of running an stVault can be as low as 1% of the staking rewards (excluding node operator costs). This would be marked improvement vs. current custodial solutions in terms of the reward profile.

The stVault contracts are completely permissionless and will operate alongside the Lido Core protocol. Sovereignty of the stVaults were a major consideration in its design and there are multiple security measures in the contracts to prevent things like oracle liabilities and governance capture (both through an immutable and permissionless escape hatch for each vault, as well as Dual Governance for all stETH holders described earlier).

Lido stVaults are currently live on Hoodi testnet and will be deployed on Mainnet later this year. For more information, please see the general introduction, the stVaults whitepaper, technical specs, as well as the current Hoodi testnet.

2 Likes
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1) Overview – What is your proposal and what benefit does it bring to the Optimism Ecosystem?

Staking a portion of the Optimism Collective’s ETH via Rocket Pool’s rETH liquid staking token (LST) on Optimism would deliver a sustainable and highly decentralised source of yield. The Rocket Pool protocol has a sole focus on its core competency - delivering market-leading excellence in decentralised Ethereum liquid staking. The protocol has no exposure to or reliance on restaking, other chains, TVL deals, token incentives, additional strategies, curators, or price oracles for its continued operation and delivery of staking rewards. This makes rETH a highly reliable asset to hold, with centralisation risks minimised.

Because of rETH’s liquidity and integrations, there are additional DeFi opportunities available on Optimism, should that be desired.

One optional add-on is the Rocket Pool “STAR program” - it would require rETH to be minted on Ethereum mainnet and then bridged to Optimism but would pay out some additional incremental rewards in the form of RPL tokens. More info on the STAR program here: https://rocketpool.notion.site/Rocket-Pool-Star-Program-Guideline-18a574a282d680d191ecfc6bd553e8f9#190574a282d6809a921af86b0e3e2511.

2) Design – Provide an overview of your system architecture and security.

Rocket Pool’s system architecture provides unique security benefits to the protocol, its users, and Ethereum as a whole. Running a node with Rocket Pool has always been fully permissionless, which means anyone can participate without prior approval or KYC. Thousands of Ethereum-aligned individuals worldwide have operated a node with Rocket Pool since launch in 2021, including EF members and protocol founders.

Uniquely in the liquid staking space, Rocket Pool does not have any permissioned/whitelisted node operators. This means that Rocket Pool is also the only LST protocol where all node operators provide their own ETH bond, which covers slashing risks. This means that rETH is uniquely overcollateralised by design. There is no need to “trust” node operators with the security of staked ETH - since they have their own ETH at stake, they are economically aligned and incentivised to perform. Because smart contracts manage all of the liquid staking (rETH) and node operator ETH deposits, trust assumptions are minimised compared to more centralised options. Rocket Pool is the most decentralised liquid staking protocol on Ethereum.

3) Risks & Mitigation – Provide an overview of the following.

  • Smart Contract Audit
    Rocket Pool maintains rigorous security standards with all smart contract changes audited by industry-leading firms: Sigma Prime, Consensys Diligence, ChainSafe, and Trail of Bits. To date, 12 comprehensive audits have been completed, and can be reviewed on the Rocket Pool website here: https://rocketpool.net/protocol/security.

  • Governance
    Rocket Pool has a rigorous and transparent governance framework that ensures the protocol remains highly decentralised. Following research and discussion among the protocol DAO (pDAO), every proposed change to the protocol must be submitted for node operators to vote on. The RPL token only has governance power when it is staked in a node, and this voting power is quadratically smoothed across each node. Approved changes are then executed onchain. Because this governance structure is distributed across thousands of independent node operators worldwide, Rocket Pool’s governance is a resilient system that resists capture by any single entity or coordinated group - also unique among the Ethereum liquid staking space. The combination of transparent processes and broad participation ensures that protocol decisions reflect the collective interests of the ecosystem rather than a privileged few: https://rocketpool.net/governance/process

  • Collateral & Financial Performance

    What is the amount of assets secured by your protocol on Optimism Mainnet?
    4,507 ETH (US$17.6m): https://optimistic.etherscan.io/token/0x9bcef72be871e61ed4fbbc7630889bee758eb81d

    What is the amount of assets secured by your protocol overall across EVM blockchains?
    641,499 ETH (US$2.17b): https://defillama.com/protocol/rocket-pool

    Have there been any significant de-pegging events in the past 12 months?
    No.

    Process for technical upgrades
    Rocket Pool’s oracle DAO (oDAO) is comprised of 11 prominent Ethereum-aligned entities. The oDAO must approve and submit any technical upgrades, following a seven-day timelock: https://rocketpool.net/governance/oracle-dao.

    Liquidity risks - how do you recommend mitigating liquidity risks? (i.e. slippage)
    A subcommittee of the pDAO, called the Incentives Management Committee (IMC), incentivises and manages liquidity on Ethereum mainnet and Optimism, among other L2s. Their targeted approach ensures deep, reliable liquidity for both staking and unstaking operations. The latest IMC reporting is available on Rocket Pool’s governance forum: https://dao.rocketpool.net/t/imc-period-41-report-period-42-budget/3818

    Regulatory risks
    SEC guidance issued earlier this year clarifies that liquid staking tokens, including Rocket Pool’s rETH, do not constitute securities. Rocket Pool’s fundamentally decentralised protocol design, which includes permissionless node operators and distributed governance, further solidifies this advantageous regulatory positioning.

4) Yield / Fees

  • What is your historical yield? What yield do you project, if any?
    Rocket Pool’s yield is closely linked to staking rewards paid by Ethereum’s Proof of Stake system. Historic yield averaged around 3% or more. Current yield is around 2.4% and is projected to be steady or slightly increase in the future due to gains from the Saturn One upgrade which is due to launch in January 2026.

  • What are your fees / commissions?
    Commissions/fees currently average 14% and are entirely paid to node operators. The current protocol architecture permanently sets commission for each validator at the time of its launch. In January, the Saturn One upgrade will implement a flexible mechanism that allows for rETH commission rate adjustments through governance. Given the pDAO’s strategic focus on driving rETH adoption, commission reductions are anticipated to enhance rETH yields and strengthen its competitive position in the liquid staking market.

5) Strategic Benefits

  • In addition to the Collective ETH (6.4K) in this proposal, how do you plan to grow OP Mainnet ecosystem around your LST (e.g., DEX liquidity, DeFi use cases)
    rETH already has multiple major DeFi integrations on Optimism, such as Aave and Compound. With the launch of the Saturn One upgrade in January, a marketing campaign is being planned in support. An increase in rETH’s presence, liquidity, and usage on Optimism would also see a corresponding focus as part of the upgrade’s marketing. The IMC generally prioritises liquidity to be directed to where rETH is used. An increase in rETH’s presence on Optimism would likely result in a corresponding shift in additional liquidity towards Optimism.
    A note from the IMC: “The Rocket Pool Incentives Management Committee (IMC) is a community-run committee responsible for directing liquidity incentives. While most of the incentives are focused on mainnet, Optimism is one of three L2s that we have seen as significant enough to warrant ongoing incentives. We would encourage the Collective to consider holding their ETH in an active position (eg, a Balancer rETH-Aave wETH position, or perhaps an LP position with rETH-anotherLST), which could earn roughly similarly to rETH while also benefitting the ecosystem through greater liquidity. If the Collective took a path like this, the IMC would be happy to significantly increase our spend on the chain (we’ve thrown out numbers like 50-70% increases, which would make Optimism our most-favored L2).”

  • What other economic benefits are there for OP Mainnet and the Superchain ecosystem?
    rETH already exists on multiple Superchain L2s such as Ink, Base, Soneium, and Unichain, with further expansion always being investigated and considered. In addition, Rocket Pool has partnered with RockSolid to provide a vault opportunity for rETH liquid stakers that returns a boosted return via curated DeFi opportunities. Rocket Pool and RockSolid work together to ensure vault funds are deployed optimally including across Superchain L2s - allocation considerations include the presence, liquidity, and usage of rETH: https://rocketpool.net/#rocksolid.

6) Security: Provide an overview of your security posture including:

  • Summarize results of all third-party security audits, including auditor names, dates, scope and keyfindings / remediation status. Provide links to public reports where available.
    Audit details can be viewed on the Rocket Pool website here: https://rocketpool.net/protocol/security.

  • Outline your bug bounty program, including historical data on reported issues or paid bounties.
    Up to US$500,000 via Immunefi: https://immunefi.com/bug-bounty/rocketpool/information/.

  • Describe your system’s upgrade process, including who can propose and execute upgrades, how decisions are made, and any existing veto or emergency powers.
    Rocket Pool’s oracle DAO (oDAO) is comprised of 11 prominent Ethereum-aligned entities. The oDAO must approve and submit any technical upgrades, following a seven-day timelock: https://rocketpool.net/governance/oracle-dao. There is currently no upgrade veto, this functionality will be added as part of the Saturn One upgrade in January. Emergency powers can only temporarily pause the protocol via a security council - funds cannot be frozen.

  • Detail the client software implementations that support your system, including the number of independent clients, and measures taken to ensure resilience.
    Just like solo stakers, Rocket Pool’s independent node operators are free to choose from any/all EL/CL clients. There is generally a high degree of Ethereum alignment and awareness of client diversity considerations among node operators.

7) Transparency & Reporting

8) Roadmap

  • What timeline will it take to deploy your proposal?
    Funds can be deployed to Rocket Pool instantly and permissionlessly. Any liquidity shifts to Optimsim would be executed at the discretion of the IMC.

  • What are the major milestones?
    Once deployed, funds will immediately begin earning rewards until withdrawn. The IMC is responsible for decisions relating to liquidity. The Saturn One marketing opportunity will run from roughly 01 JAN 26 to 07 FEB 26. RockSolid’s expansion into Superchain DeFi is ongoing.

  • What treasury operations approach for deploying the Collective ETH to your LST?
    On Ethereum mainnet, either interact with the protocol’s front end at rocketpool.net, or via the smart contracts directly. rETH can then be bridged to Optimism. Or rETH can be purchased directly on Optimism via DEX liquidity. Based on current Optimism liquidity, only relatively small volumes of ETH could be swapped to rETH in each transaction, to minimise slippage. More information on liquidity and slippage can be found here: https://xrchz.net/imc/?token=rETH.

  • What are the success metrics?
    Ongoing provision of staking rewards via rETH on Optimism. Increased rETH liquidity on Optimism as directed by the IMC. Increased awareness from participation in the Saturn One marketing opportunity in early 2026. Participation in RockSolid’s ongoing expansion into Superchain DeFi opportunities.

9) Team

  • Who are the founders of this project?
    Rocket Pool was founded by David Rugendyke in 2016.

  • What experience and track record does your team bring?
    The Rocket Pool team invented liquid staking on Ethereum back in 2019. Rocket Pool is the only liquid staking protocol that has been built since day one in close alignment with Ethereum’s core values, helping to ensure that Ethereum remains credibly neutral and free from censorship via maximal decentralisation and permissionless node operation. Rocket Pool’s many contributors are proud to have enabled thousands of diverse node operators worldwide to directly contribute to Ethereum’s Proof of Stake security.

1 Like
8

I fully support this proposal — I actually submitted a similar one before.

9

ether.fi: Optimism Liquid Staking Proposal

Submitted by: Tyson Wynne (Business Development at ether.fi)

Action Requested: Mint 6,400 ETH worth of weETH, bridge it to OP Mainnet, and use it to seed OP-native liquidity or hold in treasury to earn ETH-denominated yield.

Overview

This proposal requests approval for the Optimism Collective to allocate 6.4K ETH from its treasury into weETH, EtherFi’s non-rebasing liquid restaking token deployed on OP Mainnet.

weETH has emerged as the leading restaking asset in DeFi and is now the largest ETH-staking asset on Aave, a signal of broad and durable adoption across active onchain participants—retail users, sophisticated DeFi users, funds, institutions, and onchain treasuries.

As DeFi has matured, weETH has become a preferred treasury asset for organizations seeking reliable ETH-denominated yield and seamless access to liquidity and lending markets. This includes major public companies such as Sharplink Gaming Inc., GameSquare Holdings, and ETHZilla, each of which has deployed portions of their ETH treasuries into weETH to participate more deeply onchain and across DeFi on Ethereum.

The allocation delivers three direct benefits:

  1. ETH-denominated yield for the Treasury through Ethereum staking + EigenLayer restaking rewards.
  2. Liquidity bootstrapping for OP DeFi, enabling weETH to become a core collateral asset across Aave, Morpho, Spark, and OP-native DEXs.
  3. Superchain-wide ecosystem growth, leveraging EtherFi’s proven success scaling weETH liquidity and integrations on Base, Unichain, and upcoming networks like Ink.

weETH is fully backed 1:1 by staked ETH and integrated across 200+ DeFi protocols and 17 chains, supporting the diverse and growing set of users and treasuries that have adopted it as a core onchain asset.

Design

EtherFi is a non-custodial pooled Ethereum staking and native Eigenlayer restaking protocol built around two core assets:

  • eETH – a rebasing LRT backed by staked ETH, with redemptions prioritized through an unbonded ETH buffer and fallback validator exits.
  • weETH – a wrapped, non-rebasing ERC-20 using a share-based exchange rate for deterministic DeFi integrations, inheriting all eETH yield and redemption mechanics.

Architecture components::

  • Pooled Validator Network: EtherFi delegates stake across a decentralized set of professional node operators.
  • Staking & Restaking Pipeline: Deposited ETH enters validator activations on Ethereum mainnet and is natively restaked into EigenLayer, enabling stakers to earn consensus rewards, execution rewards, and restaking incentives (distributed weekly as KING → ETHFI + EIGEN).
  • Redemption & Liquidity Layer: Fast withdrawals served via an ETH buffer; longer withdrawals served by validator exits.
  • Reward Accounting: all rewards accrue into the share-rate of eETH/weETH + restaking to rewards into the KING token.

weETH inherits the full backing, redemption pathway, and safety guarantees of eETH.

Reference: ether.fi Staking | Gitbook

Risk & Mitigations

Governance

EtherFi Governance is currently progressing under a Foundation-plus-DAO model (Snapshot voting + onchain execution):

  • Foundation Charter + Multisig Committee: operational oversight and handling emergencies.
  • Community Participation via voting stack: governance forum + Snapshot + onchain execution.

The EtherFi governance model focuses on:

  • Decentralized Decision-Making: Empowering the community to participate in protocol upgrade decisions along with spending or transfers from the Treasury.
  • Security and Efficiency: Ensuring that changes are made in a secure and timely manner.
  • Checks and Balances: Implementing a robust voting system that values expertise, reputation, and commitment to our vision, while holding contributors accountable.

Reference: EtherFi Governance Forum

Collateral & Financial Performance

Amount of assets secured by EtherFi protocol on OP Mainnet

661 ETH is currently deployed on OP Mainnet via weETH.

Reference: Dune Analytics — ether.fi L2 Supply Dashboard

Total Amount of assets secured by the EtherFi Protocol across EVM Blockchains

EtherFi currently secures approximately 2,503,024 ETH (~$8.44B) across Ethereum and major L2 ecosystems. This scale places EtherFi among the largest and most trusted staking and restaking platforms in the industry, with broad distribution across mainnet, L2’s and the leading EVM blockchain ecosystems.

weETH is the largest liquid staking asset on the Superchain with roughly ~123k weETH. Largely across Base and Unichain.

Importantly, Base—part of the Optimism Superchain—already demonstrates the scale weETH can achieve in an OP-Stack environment: 118,093 weETH is supplied on Base, making it the largest weETH deployment across all L2s, and weETH is the #2 most supplied asset on Aave on Base, second only to ETH itself. This traction of weETH on Superchain and L2 infrastructure provides a clear signal that OP Mainnet can support similar depth and adoption with proper support from the Optimism Collective.

References: ether.fi Dune Analytics; Hildobby Ethereum Staking Data

Peg Health & de-pegging events in the last 12 months

No issues. Based on 12 months of data (Nov 2024–Nov 2025), sampled every 4 hours, weETH demonstrates the strongest and most consistent peg stability of any LRT — and its peg performance is best compared with the stability profile of stETH.

Across ~1,000 observations, weETH maintained an exceptionally tight trading band with smooth mean reversion, no ≥1% de-pegs, and only two brief single-interval prints above 0.50%, each resolving immediately. The asset exhibited a low average deviation of ~0.09% and stable cross-venue pricing, supported by deep liquidity.

Additionally, weETH is always fully redeemable 1:1 to ETH via the withdrawal queue.

Metric weETH stETH ezETH rsETH
Average Peg (mean) -0.071% -0.109% -0.161% -0.132%
Max Depeg -0.600% -0.420% -0.441% -0.965%
Standard Deviation 0.091% 0.076% 0.083% 0.089%
% of Days Below -0.15% 19.000% 22.900% 37.200% 35.256%

Reference: LRTs Premium/Discount Rates vs Market Values

Process for technical upgrades

All EtherFi contract upgrades follow a strict security pipeline: new code undergoes audits, testing, and formal verification where applicable, then is published open-source for external review. Any upgrade must pass through a 72-hour timelock and be executed by the protocol multisig, ensuring transparency and giving stakeholders time to review the exact changes before they go live. Emergency pause controls exist for critical issues, but all standard upgrades follow the same audited then timelocked process, providing a secure and predictable upgrade path.

Note: More details in System Upgrade Process below

Liquidity Risks

  • No slippage on staking: Converting ETH → eETH via the EtherFi staking contract has zero slippage and is 1:1.
  • Large redemption buffer: EtherFi currently has a ~37,571.5 ETH liquidity buffer to satisfy weETH→ETH withdrawals. If needed, the protocol exits validators to replenish liquidity and maintain the liquidity buffer.
  • Deep DEX liquidity: weETH currently has ~$140M (42,473 ETH) in multi-chain DEX liquidity, supporting tight spreads and fast peg reversion.
  • LayerZero bridging: weETH supports LayerZero, enabling fast bridging to Ethereum mainnet where deeper liquidity venues exist, providing an additional backstop for large withdrawals.

Reference: ether.fi Liquidity

Regulatory risks

EtherFi firmly believes that the Ethereum network will become the settlement layer for global financial markets. Our convictions, however, are not guarantees about the future. Cryptocurrencies and Ethereum in particular have made the leap from niche to mainstream and this increase in prominence has been accompanied by an increase in governmental scrutiny. Any number of well-meaning and / or ill-informed public policies can temporarily or permanently derail the protocol, including but not limited to: bans on cloud service providers providing services to crypto related enterprises bans on ISPs providing crypto related services onerous taxes levied on various network transactions etc. We have taken every measure necessary to keep ourselves out of regions with heavy government scrutiny.

Yield / Fees

Historical & Projected Yield

EtherFi’s historical yield is composed of two components: Ethereum staking rewards and EigenLayer restaking rewards distributed as KING. Across the past 12 months, base Ethereum staking returns for eETH have averaged 2.8–3.2% APR, which is consistent with network-wide validator performance. Restaking rewards via KING have added an additional 0.4–0.8% APR on average over this period, based on weekly distributions. Taken together, historical total yield for weETH has trended in the 3.2–4.0% APR range.

Going forward, yields are expected to remain in line with Ethereum staking returns, with incremental upside driven by upcoming restaking incentives and AVS maturation.

Reference: DeFiLlama weETH, ether.fi: KING rewards distribution, EtherFi eETH Staking

Fees / Comission

  • Stakers receive 90% of all staking + restaking rewards.
  • The remaining 10% is split between:
    • 5% to node operators
    • 5% to the protocol (operations + security)

No additional fees — no spreads, no withdrawal fees, no hidden charges beyond normal Ethereum gas.

Strategic Benefits

How EtherFi & Optimism would strategically grow OP Mainnet ecosystem around weETH

EtherFi has already executed this playbook across the Superchain: on Base, early liquidity turned weETH into one of the dominant assets on the network and the second-largest collateral on Aave behind ETH; on Unichain, weETH is live as the largest liquid restaking asset; and Ink is next. The same growth curve is available to Optimism. If the OP Treasury mints weETH and seeds a 50/50 weETH/ETH pool on Velodrome, it establishes the liquidity depth required for risk teams to green-light collateral onboarding. That liquidity unlocks the path to Aave → Morpho → Spark listings on OP Mainnet, enabling weETH to become a core borrow/lend asset on Optimism.

From there, EtherFi will drive the ecosystem expansion: preparing the full Aave onboarding package, coordinating with risk teams, pushing collateral caps safely, supporting Morpho and Spark integrations, and working with builders, LPs, and institutional users to grow adoption. Treasury involvement kick-starts the flywheel, and EtherFi executes the growth—mirroring the path already proven across the broader Superchain.

In the early phase, EtherFi’s priority on OP will be securing the Aave listing for weETH. This unlocks deeper ETH supply, healthy borrow demand, and the ETH-denominated leverage and hedging activity that make an ecosystem self-sustaining. Treasury-backed liquidity provides the depth, price stability, and volatility profile required for risk teams to approve initial caps. EtherFi will handle the technical, risk, and governance work needed for a smooth listing.

If the Optimism Treasury prefers not to seed liquidity directly, EtherFi can work with external LPs and partners to support Velodrome depth instead. Treasury seeding is simply the most efficient catalyst, but alternative paths exist.

Additional Economic benefits for OP Mainnet and the Superchain ecosystem

Deep weETH liquidity boosts OP’s economic throughput:

  • Higher transaction volume across swaps, lending, borrowing, and yield strategies
  • Increased fee revenue for OP-native DEXs and protocols
  • Stronger collateral bases + improved capital efficiency
  • Higher TVL across OP money markets
  • Strengthened Superchain alignment, matching Base’s growth curve
  • Institutional inflows, driven by treasury participation and ecosystem credibility

Rewards Share:

  • If the Optimism Collective allocates the Liquid Staking portion of its treasury to weETH, EtherFi will provide a reward-sharing arrangement that increases net yield back to the treasury. EtherFi will return 1% of gross staking + restaking yield to the Optimism Treasury, effectively reducing protocol fees on the Collective’s weETH position. These rewards are distributed quarterly to a designated Treasury address and operate as a recurring economic benefit layered on top of staking and restaking returns.

Security

EtherFi’s core and auxiliary contracts have been rigorously audited and formally verified by leading firms including Certora (continuous formal verification and rolling audits throughout 2025), Nethermind, Zellic, Halborn, Solidified, Omniscia, Paladin, Decurity, and CertiK, with all public reports available in the EtherFi audit index. Issues identified across reports have been remediated or formally acknowledged with justification prior to deployment, and Certora provides ongoing post-remediation hardening and regression checks. Security is further reinforced through a timelocked multisig upgrade process, isolated admin wallets, and an active Immunefi bug bounty program, ensuring the protocol maintains institutional-grade security and transparent upgrade practices.

Recent audit focus areas (2025):

  • weETH withdrawals and adapter redesign (Certora)
  • Pectra-readiness upgrades (Certora)
  • Instant withdrawals + withdrawal-fee logic (Certora re-audit)
  • EigenLayer slashing-related safety checks (Certora)
  • Cumulative Merkle distribution mechanics (Certora)

Public audit index: Audits | ether.fi

Monitoring

  • Certora – Continuous Audit Review & Formal Verification:
    • EtherFi gets continuous audit review on our smart contracts by the Certora team instead of a one-time audit to be on top of any security issue that might arise.
    • Mathematically proves core contract logic correctness, adding rigorous guarantees beyond standard audits.
  • Hypernative – Real-Time Risk Automation:
    • Monitors all on/off-chain activity and can automatically freeze protocol functions in response to critical threats—safeguarding assets under management.
  • Chaos Labs – Strategic Risk Partner:
    • Develops AVS/LRT frameworks, risk dashboards, and asset onboarding + liquidity assessments. Powers live risk oracles and scenario-based stress testing.

Bug Bounty Information

  • Current program: Hosted on Immunefi — EtherFi’s official bug-bounty portal is live and publicly accessible. For example, the program listing notes maximum bounties up to USD $200,000. (ether.fi Audit Competition on Immunfi)
  • Previous competition: A dedicated audit competition was held via Hats Finance on the Hats platform, open to the community and publicly listed. (ether.fi Audit Competition on Hats.finance)
  • Historical data:
    • The Immunefi program has been live since March 2024 and is still active.
    • The Hats Finance competition is documented via a public leaderboard repository.

System Upgrade Process

  • Timelock (4/7 Multisig): All core protocol upgrades require 72-hour delay, ensuring transparency & time for stakeholder review.
  • Emergency Controls (⅗ multisig pauser): Critical contracts can be paused immediately in emergencies (e.g., oracle failure, exploit). Procedures are monitored and enforced by Hypernative.
  • All contracts owned by secure multisigs: Core contracts are governed by hardware backed multisigs with high thresholds and timelock.
  • Isolated admin wallets: Admin wallets are dedicated to core protocol activity only – no outside transactions, no exposed approvals to reduce external risk.
  • Upgradable contracts with strict oversight: Core contracts use upgradeable patterns, but all changes require multisig + timelock authorization.
  • Multisig administered by key stakeholders: Admin access is controlled via a multisig consisting of internal team members and trusted external stakeholders, with signers geographically distributed to mitigate centralized risk.

Client Information

EtherFi’s validator set is operated by a diverse group of professional node operators running multiple independent Execution (EL), Consensus (CL), and Validator (VC) clients. This diversity reduces correlated risk and strengthens resilience across the network.

Across the operator set, the following clients are actively used:

  • Execution clients: Geth, Reth, Nethermind, Besu
  • Consensus clients: Lighthouse, Prysm, Teku, Lodestar, Vouch, Nimbus

To ensure operational resilience, operators employ a mix of:

  • High-availability architectures (active/standby EL + CL pairs with slashing-safe failover)
  • Distributed Validator Technology (DVT) using SSV clusters across multiple regions
  • Geographically and infrastructure-diverse deployments (bare-metal + SOC2 + multi-cloud, multi-AZ separation)
  • Automated orchestration using Kubernetes for rapid self-healing and failover
  • 24/7 monitoring and alerting for validator performance, client health, and network conditions

This combination of client diversity, fault-tolerant validator setups, and multi-region infrastructure ensures EtherFi maintains a resilient, redundant, and Ethereum-aligned validator network.

Transparency & Reporting

The EtherFi ecosystem provides multiple public dashboards to ensure complete transparency into staking performance, liquidity, and protocol activity:

  • Protocol-Level Dashboard (Dune): Displays total assets secured, L2 adoption, wallet distribution, liquidity metrics, and cross-chain flows for the entire EtherFi protocol.
  • eETH / weETH Staking Dashboard (Dune): Tracks real-time and historical staking flows, TVL, redemptions, and yield dynamics across eETH and weETH.
  • Rated Pool Performance: Provides detailed staking-pool performance data, including APR, validator behavior — giving a clear view of operational health and long-term performance.
  • EtherFi Eigenlayer Allocations: Review all Eigenlayer allocations from EtherFi.
  • Chaos Labs Risk Dashboard
  • EtherFi Dune Portal

Together, these dashboards offer real-time, on-chain visibility into yield generation, peg stability, liquidity conditions, and adoption trends. This ensures the Optimism Collective can continuously monitor the performance and security of its allocated weETH.

Roadmap

Timeline

Deployment can occur immediately upon approval. weETH is already fully live on OP Mainnet, with deployed contracts.

Deployment timeline:

  • Week 0–1: ETH → mint weETH → bridge to OP via Stargate
  • Week 1–2: (Optional) Collaborate to seed weETH/ETH liquidity on Velodrome
  • Week 1–4: Submit Aave onboarding package (with Chaos Labs)
  • Post-approval: Go-live on Aave; expand caps; pursue Spark + Morpho listings

Total time to full proposal activation: ~4 weeks, with deployment and rewards accruing from day one.

Milestones

  • Treasury Conversion (Week 0–1): Convert 6.4K ETH → weETH on OP; begin yield accrual
  • Velodrome Liquidity (Week 1–2): Launch weETH/ETH pool; target depth/low-slippage bands.
  • Aave Listing Prep (Week 2–4): Submit Aave onboarding package (risk, oracle, caps) with Chaos Labs.
  • Go-Live & Scale (Post-approval): Activate Aave listing on OP; raise supply/borrow caps as liquidity scales.
  • Comms (lightweight): Joint OP × EtherFi announcement; ongoing markets and growth updates.

Treasury operations approach for deploying the Collective ETH to your LST?

The recommended flow:

  1. Stake ETH on Ethereum mainnet → receive weETH.
  2. Bridge weETH to OP via Stargate (~$0.005 + gas).
  3. Deploy into Velodrome or hold in Treasury wallet.

EtherFi can work directly with the Treasury’s wallet or custody provider if direct minting support is preferred. (Utila, Safe, Anchorage, Fireblocks, etc.)

Success Metrics

To be finalized jointly with the Optimism Collective. Core metrics include:

  • ETH-denominated yield generated by the Treasury
  • weETH TVL growth on OP
  • Depth of weETH/ETH liquidity pools
  • Aave/Spark/Morpho weETH integration metrics (caps, utilization, borrow demand)
  • Trading volume + user activity across OP DeFi

Team

Founders

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EtherFi Team Experience & Track Record

EtherFi’s team has a proven history of building, scaling, and operating mission-critical crypto infrastructure. The founding team includes operators with prior company exits to IPO and private equity, and decades of combined experience across trading, engineering, cybersecurity, and crypto markets. This fully doxxed, globally distributed team has consistently delivered products that scale.

Starting with Stake (eETH/weETH), EtherFi has built Ethereum’s largest native restaking platform, now securing over 2.48M ETH and serving more than 200,000 wallets across retail, funds, institutions, and onchain treasuries. Building on this foundation, the team successfully expanded into EtherFi Liquid and Cash, both of which have seen strong adoption and reinforced EtherFi’s position as a vertically integrated, multi-product ecosystem powered by Ethereum.

weETH has become a blue-chip DeFi primitive, integrated across 200+ protocols and deployed on 17 chains. Major public companies—including Sharplink Gaming, GameSquare Holdings, and ETHZilla—now use weETH as a core treasury asset, highlighting the protocol’s reliability and institutional readiness. This blend of operational maturity, execution velocity, and demonstrated ability to scale positions EtherFi as a capable and long-term aligned partner for the Optimism Collective.

10

While dHEDGE does not issue its own ETH liquid staking derivative (LSD), we propose a complementary solution that enhances the utility and yield potential of existing LSDs, specifically Lido’s wstETH, on Optimism. By combining dHEDGE’s battle-tested vault infrastructure, onchain analytics, and automated yield optimization, with Lido’s trusted staking foundation, this proposal creates a powerful, capital-efficient, fee-free product that maximizes the value of the Optimism Foundation’s ETH holdings while deepening liquidity and activity within the Optimism ecosystem.**

Overview** – What is your proposal and what benefit does it bring to the Optimism Ecosystem?

We propose to utilize the following WETH/wstETHh concentrated liquidity pool on Velodrome, managed via dHEDGE smart contracts. The Optimism Foundation’s ETH allocation (converted proportionally to wstETH) would be deposited directly into this vault to:

  • Provide the Optimism Foundation a transparent, non-custodial, on-chain vehicle to earn ETH yield through LSD liquidity.

  • Earn staking yield from wstETH appreciation.

  • Earn DEX trading fees and potential VELO emissions from the liquidity pool.

  • Strengthen trusted, blue chip ETH LSD liquidity on Op Mainnet for other protocols and users. Boost TVL on Op Mainnet via the deposit to dHEDGE & the vaults deployment of assets to Velodrome.

  • Provide a dedicated UI for the Optimism Foundation to transparently monitor their LSD holdings, yield performance, and relative value against ETH spot in both ETH & USD terms.

This strategy can be deployed immediately as the dHEDGE contracts for this type of vault have been audited and are already operational on Optimism for other use cases.

Design – Provide an overview of your system architecture and security.

  • Underlying Assets - WETH & Lido’s LSD - wstETH

  • Vault Mechanics - Deposits are routed to the aforementioned Velodrome WETH/wstETH pool via dHEDGE contracts. The vault auto-compounds DEX rewards into additional WETH/wstETH liquidity.

  • Integration - Fully on-chain, using audited dHEDGE V2 contracts, already operational and battle tested on Op Mainnet.

Risks & Mitigation – Provide an overview of the following.

Smart Contract Audit

dHEDGE has undergone regular audits since its launch in 2020, a timeline of which can be found here. Our contracts and integrations have been reviewed by leading security firms including Sherlock, Santipu, iosiro, Trust Security and others. Auditing is an ongoing process, complemented by an active bug bounty program, ensuring continuous monitoring and remediation

Governance

Strategic protocol decisions, such as integrations, new features, or large protocol-level initiatives, are voted onchain by all DHT token holders.

Critical upgrades, treasury management, and contract operations are controlled via a multi-sig held by core team members and trusted advisors. All changes are reviewed internally and deployed only with multi-sig approval. Emergency pause mechanisms are built into key contracts to protect assets.

All upgrades and strategic decisions are transparent and auditable on-chain, providing both security and accountability for treasury and protocol management.

**Collateral & Financial Performance

What is the amount of assets secured by your protocol on Optimism Mainnet?**

11.2m

What is the amount of assets secured by your protocol overall across EVM blockchains?

45.3m

Have there been any significant de-pegging events in the past 12 months?

dHEDGE has never experienced a de-peg or hack

Process for technical upgrades

dHedge periodically completes upgrades to support new underlying protocol integrations. Firstly, there is a governance vote. Once passed, the development of the integration starts. After audit, the upgrade is completed through a team multisig.

Liquidity risks - how do you recommend mitigating liquidity risks? (i.e. slippage)

The vault will hold WETH & wstETH, both of which are actively traded and highly liquid on major Optimism DEX’s like Velodrome. Swaps will be carefully processed (i.e. in 100 WETH shows slippage of 0.01) portions intermittently to avoid value loss from slippage. While slippage is an inherent aspect of onchain execution, dHEDGE’s extensive experience in deploying and managing yield strategies enables us to effectively anticipate and mitigate slippage, ensuring efficient execution and value preservation.

Regulatory risks

dHEDGE is a DAO governed protocol where all operations are transparent & executed onchain. Given this vault’s passive, staking-only design, regulatory exposure is limited and consistent with existing LSD products.

**Yield / Fees

What is your historical yield? What yield do you project, if any?**

This vault takes a conservative approach to yield generation prioritizing capital protection with steady yield generation.

With that in mind, we anticipate approximately 8% APY.

What are your fees / commissions?

We will not charge any fees or commission

Strategic Benefits

In addition to the Collective ETH (6.4K) in this proposal, how do you plan to grow OP Mainnet ecosystem around your LST (e.g., DEX liquidity, DeFi use cases)

  • Deepens blue chip ETH LSD liquidity on Op Mainnet, improving pricing and execution for all users.

  • Provides TVL boost to Op mainnet via the deposit to dHEDGE contracts and the vaults allocation of those assets to Velodrome.

What other economic benefits are there for OP Mainnet and the Superchain ecosystem?

  • Establishes a composable native LSD yield product for other protocols to build on

  • Provides the Optimism Foundation a transparent, non-custodial, on-chain vehicle to earn ETH yield through LSD liquidity.

Security: Provide an overview of your security posture including:

Summarize results of all third-party security audits, including auditor names, dates, scope and keyfindings / remediation status. Provide links to public reports where available.

All audits and their findings can be found here.

Outline your bug bounty program, including historical data on reported issues or paid bounties.

dHEDGE has a bug bounty program with Immunifi that rewards white hats with up to $50,000 USDC depending on the severity of the bug reported. To date no meaningful bugs have been discovered, however; it continues to provide the opportunity for auditors to be rewarded for reviewing and finding deficiencies in our code base.

Describe your system’s upgrade process, including who can propose and execute upgrades, how decisions are made, and any existing veto or emergency powers.

Upgrades/integrations can be proposed by any community member in the dHEGE forum. If passed, development begins followed by an audit, with the upgrade finally implemented once the audit is complete and the results are satisfactory. An emergency pause function allows the multisig to temporarily halt vault operations if needed, safeguarding user funds until next steps can be determined.

**
Detail the client software implementations that support your system, including the number of independent clients, and measures taken to ensure resilience.**

N/A

Transparency & Reporting

How do you plan to provide reporting on staking performance and general success criteria?

All vault operations are fully on-chain and verifiable, ensuring complete transparency for the Op Foundation and the broader community. Performance, positions, and accrued yield can be monitored directly through the dHEDGE vault interface (“My Deposits” or the vault page), which displays:

  • Total vault value and individual deposit value in rETH/wstETH, ETH, & USD terms

  • Staking yield accrued over time

  • Liquidity pool positions and earned fees/rewards

  • Historical performance compared to ETH spot price

In addition, the dHEDGE Analytics Page will allow the Optimism Foundation to dive deeper into the vault’s metrics.

These built-in tools will allow the Foundation to easily track holdings, yield performance, and relative value, providing insight into the vault’s effectiveness. This approach ensures that both the Optimism Foundation and the broader ecosystem have full visibility into strategy execution, staking yield, and LP performance.

What dashboards and tools can the community use to monitor performance?

Answered in the above question

Roadmap

What timeline will it take to deploy your proposal?

Immediately. We already have the vault architecture successfully deployed and operational in other dHEDGE use cases.

What are the major milestones?

  • Bots being deployed

  • Vault showing on dHEDGE UI

  • ETH being fully deployed to the Velodrome pool via the dHEDGE vault

  • Maintenance of 8% yield target (ongoing goal)

What treasury operations approach for deploying the Collective ETH to your LST?

N/A

What are the success metrics?

Maintenance of 8% yield on vault assets

**Team

Who are the founders of this project?**

Ermin Nurovic - Linkedin

Radek Ostrowski

Henrik Andersson

What experience and track record does your team bring?

The founding team, comprising Ermin Nurovic, Henrik Andersson, and Radek Ostrowski, brings a wealth of experience from both the web3 and traditional tech startup spaces. Their combined expertise in security practices and product development, without relying on inflationary token incentives, has been instrumental in dHEDGE’s success.

This team is also responsible for building Toros Finance, Flat Money, and the current incarnation of mStable.