Following the approval of Referendum #205, the community agreed on a framework to redeploy excess ETH reserves to enhance protocol efficiency and user yields.
Given the current market environment marked by lower liquidity and increased volatility, 35% of excess reserves will be converted into USDT and deployed into RWA-backed stable yield strategies to generate sustainable treasury income.
We propose a modest adjustment to the previously discussed allocation ratios to strengthen treasury stability.
Updated allocation plan:
- 15% allocated to vETH Loop Stake
This proposal concerns the 15% allocation dedicated to supporting vETH Loop Stake lending liquidity.
The adjustment maintains support for capital-efficient staking strategies while improving the protocol’s defensive positioning in a more uncertain market cycle.
Implementation Plan
- Withdraw 15% of the exceeding ETH reserves from the Bifrost Treasury
- Adding ETH to launch vETH Loop Stake
Expected Impact
- Increase borrowing depth within the vETH Loop Stake pool
- Support larger-scale loop staking participation
- Improve capital efficiency for vETH holders
- Diversify the DeFi strategy for vETH
By expanding lending liquidity, users can leverage their vETH positions more efficiently, enhancing staking APY through structured loop strategies while maintaining on-chain flexibility.