osETH Onboarding

osETH Onboarding


Aave Chan Initiative



Simple Summary

This is a ARFC proposal for adding borrow/lend support for StakeWise’s new over-collateralized staked ETH token, osETH, on AAVE V3 Ethereum.


Liquid staking tokens (LSTs) have proven to be popular collateral assets on Aave, with Lido’s stETH the largest Reserve across all Aave deployments and rETH quickly reaching its supply caps. As productive assets, LSTs are high quality collateral to borrow against. Given their high correlation to ETH, LSTs are commonly used as collateral to borrow ETH and engage in yield leveraged staking, with several communities having built products that automate such strategies on top of Aave. The introduction of eMode only made such strategies more popular.

osETH in particular is overcollateralized by design, providing in-built slashing protection and consequently an increased level of protection for the Aave protocol.

As StakeWise V3 provides solo stakers to ability to mint osETH against their own nodes, on-boarding osETH will benefit Aave, StakeWise, and the Ethereum ecosystem as a whole, and be an important step in the pursuit to diversify Ethereum staking and encourage staking from home.

The onboarding of osETH will consequently create increased osETH demand and increased revenues for both Aave and StakeWise protocols, whilst also bolstering the liquidity and peg stability of osETH.


The table below illustrates the configured risk parameters for osETH

Isolation ModeFalse
Collateral Enabledtrue
Supply Cap (osETH)10,000
Borrow Cap (osETH)1,000
Debt CeilingUSD 0
LTV72.5 %
LT75 %
Liquidation Bonus7.5 %
Liquidation Protocol Fee10 %
Reserve Factor15 %
Base Variable Borrow Rate0 %
Variable Slope 17 %
Variable Slope 2300 %
Uoptimal45 %
Stable BorrowingDISABLED
Stable Slope10 %
Stable Slope20 %
Base Stable Rate Offset0 %
Stable Rate Excess Offset0 %
Optimal Stable To Total Debt Ratio0 %
Siloed BorrowingDISABLED
Borrowable in IsolationDISABLED



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by BGD Labs