Create native ETH -> yETH deposit facility

Abstract

Write and deploy a minting contract that mints yETH using ETH, up to a limit. The minted yETH is added as debt that is repaid as deposited ETH is converted to yETH over time.

Motivation

Using ETH to directly mint yETH is currently not supported natively by the protocol. ETH depositors are instead directed to the yETH/ETH pool, where large deposits incur slippage. A deposit function accepting ETH (in addition to the currently accepted LSTs) is desired to facilitate yETH onboarding.

Future possibilities

• yETH -> ETH withdrawals (ie a reverse route)

Specification

If this proposal is adopted, a new contract will be written and deployed with the following properties.

• The contract will be added as a yETH minter
• The contract is permissionless and accepts ETH deposits in exchange for newly minted yETH in 1:1
• The contract keeps track of the debt generated by minting yETH
• The contract has a debt ceiling that is configurable by governance, with a starting value of 1000 ETH
• The deposited ETH will be transferred to the AMO
• The AMO can choose to use the deposits as POL or can convert it to yETH on the market
• The yETH can be used to (partially) pay off the debt in the yETH minter contract, freeing it up for additional deposits