Set yETH Pool Inclusion Rules and Weight Limits

Projects yETH
1

Abstract

Make the following adjustments for the yETH Pool:

  • Limit the weights individual LSTs in the yETH pool to be in the range of 0.1-33%
  • Enable opt-in inclusion voting for new LSTs post the 8th LST
  • Establish minimum criteria for LST inclusion

Motivation

With over $15m in TVL and 7 LSTs, yETH pool’s maturation demands updates for improved governance and quality:

Weight Limits

  • Limiting LSTs to a third of the pool ensures diversification and prevents governance manipulation

Opt-In Inclusion Post 8 LSTs

  • Balances diversity with quality control in the pool
  • Curbs the increase in gas costs that occur as additional LSTs are added to the pool

Minimum Inclusion Criteria

  • Clarifies which LSTs are eligble
  • Reduces time on unqualified applications
  • Maintains pool composition quality

Future Possibilities

The proposal allows for modifications based on evolving pool and governance dynamics.

Specification

Weight Limits

  • Set min_weight=0.01 for any LST in yETH.
  • Set max_weight=0.33 for any LST in yETH.
  • Votes exceeding max_weight are discarded.

Opt-In Inclusion Post 8 LSTs

  • Disable additional inclusion votes after 8 LSTs by default.
  • Require a governance vote passing in the previous epoch to enable inclusion votes in the next epoch.

Inclusion Criteria

  • LST must meet both of the following conditions:
    1. Withdrawals enabled for the LST, making underlying ETH redeemable.
    2. LST protocol distributes earned staked ETH rewards, on a weekly or more frequent basis.

Implementation

  • Immediately
5 Likes
2

Additionally I think some performance baseline should be included to ensure operational effectiveness, 97% attestation rate.

Also running mev boost should be a requirement for consideration.

2 Likes