KVORUM
aaveSource: Aave governance v3 · #434

Add WETH to the rsETH LST E-Mode on Aave Core Instance

executedJan 19, 2026, 01:12 PM UTCby570x57ab…2922

01Summary

AISummary by Kvorumclaude-haiku-4-5

Add WETH as a borrowable asset in the rsETH/LST E-Mode category on Aave V3 Core market to enable rsETH/WETH yield strategies, improve WETH utilization, and potentially attract up to $1B in rsETH inflows.

Type
parameter change

Key changes

  • Add WETH as a borrowable asset in rsETH/LST E-Mode (previously only stablecoins and other LSTs were borrowable)(high)
  • rsETH maintains 93.0% Max LTV and 95.0% Liquidation Threshold in E-Mode(medium)
  • Enable rsETH/WETH leverage loops to increase WETH borrowing demand and utilization on Core market(high)

Notable concerns

  • Proposal relies on expected $1B in rsETH inflows which may not materialize
  • Increased leverage loops could introduce additional liquidation risk during market downturns
  • rsETH is a newer liquid staking derivative with less historical track record compared to established alternatives like wstETH
ContractsAaveV3Ethereum
Generated by Kvorum
model: claude-haiku-4-5
provider: anthropic
profile: anthropic-fast-v1
prompt: v1.0
generated: 2mo ago
Read the description ↗

02Description

324 words

Simple Summary

This proposal seeks to extend utility for rsETH on the Aave V3 Core market by adding WETH debt to the current rsETH/LST E-Mode category.

Motivation

The Aave Core market has recently experienced significant ETH inflows, increasing the available supply and lowering utilization. Maintaining a healthy utilization rate on WETH is crucial for protocol revenue and lender incentives.

rsETH is a liquid staking token issued by Kelp, already proven across Aave deployments as a robust collateral asset. Currently, rsETH suppliers on the Core instance can only borrow stablecoins and access the LST E-Mode, which limits their leverage strategies.

By adding WETH to the rsETH/LST E-Mode, the protocol unlocks classical rsETH/WETH yield maximising loops, historically one of the largest sources of borrowing demand on Aave.

Given the strong demand on the sidelines and proven growth potential of Kelp’s LRT ecosystem, we expect up to $1B in rsETH inflows, absorbing idle ETH liquidity on the Core market and restoring optimal utilization.

Specification

E-mode (rsETH LST Main) - Core

ParameterrsETHwstETHETHxETH
CollateralYesNoNoNo
BorrowableNoYesYesYes
Max LTV93.0%---
Liquidation Threshold95.0%---
Liquidation Bonus1.0%---

Useful Links

[ARFC] Add rsETH to Aave V3 Ethereum

[Direct to AIP] Onboard rsETH to Aave V3 Avalanche Instance

rsETH Documentation: https://docs.kelpdao.xyz/

Disclaimer

This proposal is powered by Skywards. The Aave Chan Initiative is not directly affiliated with Kelp DAO and did not receive compensation for creation of this proposal.

References

Copyright

Copyright and related rights waived via CC0.

03Mismatch analysis

AIMismatch analysis by Kvorum

A calldata-vs-description analysis is not generated yet. Review the decoded actions →

04Actions

1 total
#0fallback()chain 0x1
Target
0x9675…2e9b
Value
0 wei
Function
fallback()
Arguments
{}
Calldata

05Tally

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06Voters

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07Forum

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