$brETH Introduction

Overview of $brETH


$brETH: @BlackRockFi's first non native token in Arbitrage Fund - powered by LSD, bonds, and concentrated liquidity #VolatilityFarming

1. Passive yield generation:

Similar to aBTC, brETH will be mintable using ETH with 0.3% minting fees and 0.7% redeeming fees.

Fees will be kept at a lower side to incentivize more arbitrage volume as ETH is a high mcap asset with lower price deviation.

All ETH deposits will be deposited into stETH @LidoFinance, earning extra yield for treasury while the arbitrage machine runs.

=> Our collaterals will be generating passive yields on top of all the fees from arbitrage.

This innovation ensures that the yields are more consistent, producing yields even during periods when there is no volatility on the market.

2. Smart, Protocol-owned #VolatilityFarming:

For the first time, we will acquire #POL of $brETH via our bonding program.

While rewards/incentives need to be supplied constantly to retain deposits, bonds only cost us a one-time $BTC payment to acquire protocol-owned liquidity.

These POLs will generate fees for us forever! via LP fees, arbitrage fees, and passive yield.

3. Smart bonding:

The above bond will have a points requirement.

This will ensure that the discounted $BTC falls into the good hands of long term stakers and community members.

As a result, this will reduce the sell pressure from bonders while stacking up our treasury with POLs that continuously earn fees for the protocol

4. Concentrated liquidity incentivization and $aBTC funneling:

Finally, we will also incentivize brETH-USDC LP on Merkl with most of the fees we have collected to further boost arbitrage activities.

Since we don’t want the buy back to be neutralized by the farmers selling, we will only use most of the fees as incentives. The remaining will be added to our main native pair $aBTC-$ETH.

Concentrated liquidity incentivization will maximize the arbitrage output and bring the most fees back to our protocol.

5. Smart rewards distribution:

100% of fees collected will be used to buy back $aBTC and give back to LPers as rewards.

This is to ensure that all fees go towards bringing value for $aBTC and arbitrage activities.

None will be given to early minters of vault assets as this will only benefit early minters and not the overall long term yield for the protocol.

6. Timeline:

brETH is expected to be seeded by the treasury and then officially live for users in 7-10 days.

Since this is a huge integration that brings lots of $ETH whales to the ecosystem, we will take our time to make sure security is tight and the reach is big enough.

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