Summary:
Propose the creation of a new Fraxlend pair on the Ethereum mainnet: ynETH/wfrxETH & ynETH/FRAX.
Important to read we already have a market on Curve Lend see the parameters here: LlamaLend Market Parameterization for ynETH - Llama Risk
Details:
- Fraxlend Pair Name: ynETH/wfrxETH & ynETH/FRAX - Variable Rate V2
- Chain: Ethereum Mainnet
- Max Authorized Allocation: 2,000,000 FRAX
- Max Loan-to-Value (LTV): To be decided by the development team.
Background and Motivation:
YieldNest is a next-generation liquid restaking protocol that offers simple, high-yielding, risk-adjusted restaking and DeFi strategies across multiple protocols. Our mission is to simplify restaking and DeFi by creating a one-stop shop for easy-to-understand LRTs. These products can be created permissionless, curated, and managed by YieldNest subDAOs or external parties.
Website → https://www.yieldnest.finance/
Asset Name → YieldNest Restaked ETH
Asset ticker → ynETH
Asset type → Liquis restaking token
Asset contract → 0x09db87A538BD693E9d08544577d5cCfAA6373A48
Audit → https://docs.yieldnest.finance/security/audits
Codebase → GitHub - yieldnest/yieldnest-protocol: The YieldNest On-Chain Protocol
By introducing the ynETH/wfrxETH & ynETH/FRAX pair, Fraxlend can tap into the strong demand for ynETH, offering new borrowing and lending opportunities. This aligns with Fraxlend’s strategy of supporting valuable assets within the DeFi ecosystem. The development team will determine the appropriate LTV to balance risk and opportunity.
Liquidity Profile:
It is important to read we already have a market on Curve Lend see the parameters here: LlamaLend Market Parameterization for ynETH - Llama Risk
ynETH is a native Liquid Restaking Token (nLRT), that aims to maximize yield by delegating assets to a basket of EigenLayer AVSs across different verticals. Users deposit ETH which is staked on the Beacon Chain and then restaked with a restaking platform like Eigenlayer. Users receive ynETH representing a tradable and liquid token receipt of its underlying ETH.
Auto compounding rewards are sourced from Ethereum staking, AVSs, and airdrops. Rewards are accrued in the ynETH contract, thereby increasing the pool’s total value and increasing the value of ynETH (i.e. non-rebasing).
| Asset | ETH TVL | Unique Stakers | Deposit Count |
|---|---|---|---|
| ynETH | 4336 | 809 | 1229 |
Source: Yield Protocol - Dune 12/01/2024
ynETH Supply Distribution
The main Liquidity source for ynETH is on Curve in it’s ynETH/wstETH LP.
Why Adding ynETH to Fraxlend is Beneficial:
Adding ynETH to Fraxlend enhances capital efficiency, boosts TVL, diversifies lending markets, and fosters ecosystem growth, benefiting both protocols and their users.
Redemption Mechanisms:
The redemption mechanism currently uses an asynchronous withdrawal queue, which is subject to a delay of approximately less than or equal to the withdrawal delay of the underlying collateral from Eigenlayer (7 days) + Beconchain que.
- ynETH Withdrawal Overview
Users call requestWithdrawal()for the amount of ynETH they want to redeem. The ynETH amount is transferred to the WithdrawalQueueManager and a corresponding NFT is minted that contains a unique ID, the amount being withdrawn, the withdrawal fee, the redemption rate, and the request timestamp. The NFT is not bound to an address but cannot be canceled.
After all waiting periods have elapsed, sufficient funds are available and the withdrawal has been processed the user can claim their funds with their NFT ID. Claiming burns the ynETH and the corresponding NFT, with the redeemed funds being sent to the user’s address.
Faster alternative redemption methods include swapping ynETH on secondary sites such as AMMs e.g. Curve or selling a claim NFT to another party prepared to wait.
Source: YieldNest Docs - ynETH withdrawals
Oracle Type
ynETH utilizes market-based oracles provided by Pyth, eOracle, and Ojo.
We currently have Chainlink price feeds deployed on Base and Optimism, which are aligned with our protocol-provided rate, and we plan to expand to the mainnet as well. Additionally, we have deployed a Curve oracle. It would be ideal to leverage the Curve oracle like Curve Lend.
Voting:
- For: Approve the creation of the ynETH/frxETH Fraxlend pair on Ethereum Mainnet with the specified max authorized allocation and allow the development team to decide the LTV.
- Against: Do not approve the creation of the new Fraxlend pair.