Background
As part of the excess reserve optimization approved in Referendum #205, funds were designated to enhance liquidity infrastructure and staking efficiency.
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.
In light of current market volatility and the need for more stable treasury income, the allocation ratios have been updated:
- 10% allocated to vETH-ETH Stable Swap liquidity
This proposal covers the 10% allocation intended to deepen the vETH-ETH Stable Swap pool.
The revised allocation preserves support for core liquidity infrastructure while reinforcing long-term treasury sustainability.
Implementation Plan
- Withdraw 10% of the exceeding ETH reserves from the Bifrost Treasury
- Query the real-time asset ratio of the vETH-ETH Stable Swap pool at execution
- Convert a portion of the withdrawn ETH into vETH at the prevailing pool ratio
- Deposit the resulting ETH and vETH into the pool in a balanced proportion to minimize price impact
Expected Impact
- Significantly deepen vETH-ETH pool liquidity
- Reduce swap slippage for large transactions
- Improve real-time bidirectional convertibility between ETH and vETH
- Strengthen vETH’s position as a highly liquid staking derivative
Enhanced liquidity ensures users can enter and exit vETH positions efficiently, supporting both staking participants and DeFi integrators across multiple chains.