[RFC] - Stake idle ETH on Enzyme Vault to ether.fi

[BraveNewDeFi]

Thanks, @rok, for this detailed proposal. I think Ether.fi represents a good opportunity for the Mutual. You can find my comments below and a link to my broader thoughts on both investment allocations on @Rei’s post about how we manage the Snapshot signalling votes for these two RFCs.

Comments

@rok

Stakers can redeem ETH out of eETH/weETH without the 7 days withdrawal period as long as etherfi has the available liquid ETH in the contract. Users can always redeem 1:1. etherfi is the only native Liquid Restaking Protocol with withdrawals enabled.

• How much liquidity is typically available for redemptions? The above highlights that Etherfi keeps liquidity available for redemptions, but should the liquidity be exhausted, then any weETH or eETH holders would need to wait the seven (7) day withdrawal period from EigenLayer or wait for more liquidity ahead of the seven day withdrawal window.
• I know that the Chaos Labs report highlighted 40.6k in liquidity for withdrawals. I wanted to confirm if that number is still accurate or if all the ETH held in this contract is available for withdrawals?

@rok

Current rewards: 3.5% + points (etherfi and EigenLayer points have yielded ~70% APY)

• I know you probably can’t confirm but is there any indication of what the rate of rewards would be if the Mutual were to allocate to weETH?

@rok

Expected: ~7% in perpetuity. This rate is a bit more difficult to determine but AVS will pay for block space in the upcoming months, we’ve seen that to be around 100 basis points per AVS. This will be paid out in a variety of different ways, but we feel comfortable that it should be at least 7%.

• Do you know when AVSs will start paying for blockspace? I know it’s hard to project but this does impact my view of a potential allocation. As of right now, it’s hard to weigh potential future yield when I don’t know how far in the future the Mutual would have to wait for the estimated 7% to kick in.

Overall, I’m more cautious on an allocation to Ether.fi due to additional smart contract risk with EigenLayer and AVSs not being live just yet. We also have correlation risk to manage with active cover, but that can be managed within the Mutual, as well.

I’ve shared my broader thoughts on how much I would support allocating to Ether.fi at this time in Rei’s Suggested Governance Approach for June ‘24 Investment Proposals post

Suggested Governance Approach for June '24 Investment Proposals

Thoughts on Allocation to Stakewise and Ether.fi I appreciate the detailed proposals posted by both the @Avantgarde and Ether.fi teams ( @rok ). I will share my thoughts on both proposals but given we’ll be using a Snapshot signalling vote to gauge sentiment on where to allocate the idle WETH from the Enzyme vault, I wanted to share my thoughts on how to best split the allocation. Allocation to Stakewise Projected Base Yield: 3.99% APR Chorus One Fees: 5% of Yield (1) Avantgarde’s Proposed All…