Set yETH Pool Inclusion Rules and Weight Limits

Abstract

Make the following adjustments for the yETH Pool:

• Limit the weights individual LSTs in the yETH pool to be in the range of 0.1-33%
• Enable opt-in inclusion voting for new LSTs post the 8th LST
• Establish minimum criteria for LST inclusion

Motivation

With over $15m in TVL and 7 LSTs, yETH pool’s maturation demands updates for improved governance and quality:

Weight Limits

• Limiting LSTs to a third of the pool ensures diversification and prevents governance manipulation

Opt-In Inclusion Post 8 LSTs

• Balances diversity with quality control in the pool
• Curbs the increase in gas costs that occur as additional LSTs are added to the pool

Minimum Inclusion Criteria

• Clarifies which LSTs are eligble
• Reduces time on unqualified applications
• Maintains pool composition quality

Future Possibilities

The proposal allows for modifications based on evolving pool and governance dynamics.

Specification

Weight Limits

• Set min_weight=0.01 for any LST in yETH.
• Set max_weight=0.33 for any LST in yETH.
• Votes exceeding max_weight are discarded.

Opt-In Inclusion Post 8 LSTs

• Disable additional inclusion votes after 8 LSTs by default.
• Require a governance vote passing in the previous epoch to enable inclusion votes in the next epoch.

Inclusion Criteria

• LST must meet both of the following conditions:
  1. Withdrawals enabled for the LST, making underlying ETH redeemable.
  2. LST protocol distributes earned staked ETH rewards, on a weekly or more frequent basis.

Implementation

• Immediately