Episode 14
unshETH: Decentralizing Validators with LSDfi

Our guest today is Wagmi, Project Lead at unshETH. unshETH aims to further validator decentralization by creating a marketplace for staked ETH liquidity in which liquid staking protocols can compete for dominance through incentive mechanisms.

In this conversation, we explore the current state of LSDfi, how you can diversify your staked ETH exposure while earning yield through unshETH, and the protocol's mission of validator decentralization. We also discuss the risks associated with unshETH's basket index as well as future developments in the roadmap.


Hey everyone, I'm your host David. I lead research at Exponential. I'm also a fellow DeFi degen. Exponential DeFi is a platform where we want to bring more rationality into the space and make it more accessible to all types of investors. In Degen Responsibly, we invite protocol builders to talk about their innovations, what makes their protocols unique, as well as how they manage and mitigate risk. Today, we have unshETH as our featured guest. And from the protocol, we have Wagame. Before jumping in, we always like to first ask our guests how they first got started in crypto or DeFi, and when did you decide to go all in? Awesome. Hey, very nice to be here on this basis. Thanks for hosting us. Yeah, so as for myself, I got into crypto back in 2013 or so. This is when sort of online poker had been shut down already. And I was actually a very big online poker player. And yeah, sort of the only way to play online poker at this time that was really popular was this website called Seals with Pups, where you had to deposit Bitcoin. And yeah, you could play poker, online poker with Bitcoin. So that's how we all got started, me and my friend circle. But then, you know, that was so long ago and it was sort of a side thing. But yeah, I would say I sort of really went all in 2020 onwards. So my background's in traditional finance. So I used to work for a large macro hedge fund, for construction and trading. And I've been doing that since pretty much, you know, since college, since my Bitcoin days. And then, yeah, like 2020 onwards, I've been dabbling in crypto, DeFi, sort of applying, you know, my quant background to DeFi, sort of lent itself well, building systematic trading strategies and so forth. And then, yeah, joined unshETH. Yes, you know, basically building unshETH now, which I guess, yeah, unshETH, really the idea was as ETH staking, you know, as it becomes possible to withdraw ETH from being staked. After the Shapella upgrade, which went live a couple of months ago, the idea was, you know, sort of this entire space, the ETH liquid staking space is going to take off. And yeah, we've noticed that and I just want to be part of the ride. So sort of went super all in with unshETH. Nice, nice. Yeah, a lot to unpack here. But before we dive deeper into unshETH, just at a high level, could you sort of talk about what LSDFi is? One, and two, why has this been such a hot topic this year? And lastly, where does unshETH fit within that ecosystem? Yeah, that's great. Yeah. So I think if you look at the Ethereum ecosystem in total, so in total, there's, yeah, just at the macro level, there's like $220 billion in Ethereum. That's sort of the Ethereum market cap. And then, you know, Ethereum obviously went to a proof of stake blockchain network, or like the method of validation went from proof of work to proof of stake back in October or something of last year. And yeah, essentially, what you see with other proof of stake blockchains is, you know, the amount of their native token that stake ranges between like, you know, 50 to 80%. Whereas that Ethereum, it's only 15%. And the reason for that is kind of obvious, because essentially, you know, we didn't start as a proof of stake network. So therefore, and also there's a lot more to do on ETH. So yeah, you know, people are paying ETH as the gas token for a number of things. So it's just hard to have like it all staked. But you know, essentially, what I was referring to, there's this thing called a Chappella upgrade that went live a couple months ago, which made it possible for users to stake their ETH to withdraw their ETH back into native ETH. So this just meant that like staked ETH is essentially now fungible with native ETH. And sort of a lot of people are predicting that, you know, the percentage of staked ETH is going to go up a lot. Because when you stake your ETH, you not only help secure the network, which is sort of good for everyone, but also you're earning the network fees and the staking yield, which is essentially network fees plus inflation. And it's sort of like you're just earning a yield on your ETH. So if you're going to hold ETH anyway, you might as well hold staked ETH because you're helping secure the network and earning an additional yield on top. So that's sort of where liquid staking comes in. So what liquid staking does is takes your staked ETH and provides a liquid wrapper to it. So you can essentially use that already staked ETH throughout DeFi in a totally composable manner. So anything that you now do with LSD, so liquid staking token, liquid staked ETH, whatever, is now you can get basically what you're getting with ETH plus the yield. So it's just like almost strictly better. And LSD DeFi as a category is essentially taking what I think of it is essentially reworking DeFi to work with liquid staked ETH as sort of a base layer asset as opposed to ETH. Just because now everything comes with this 5% yield before you even begin talking about stacking ETH. So let me pause there. Yeah, to your point, for ETH holders, if you're not staking, you're sort of losing your value through that annual inflation. But why don't we dive into what the core product of unshETH is? What's your core mission? What are you trying to achieve? Yeah, so what unshETH is trying to achieve is really like this. Well, first of all, we want to grow the liquid staking ecosystem that sort of we think of ourselves as sort of at the center of this ecosystem. And we want to grow it because we think it'll be good for the network to have more people participating, staking their ETH, etc. And then sort of the secondary mission, which is also one of the core values to us is we believe that ETH should be staked in a diverse set of validators. It should not be the case that there is one single centralized point of failure, where most of the ETH is staked. Now, already, that's not the case today. But you can imagine, for example, if, you know, not to name any names, but if everyone staked their ETH with a single centralized exchange, that was, you know, that then, you know, ran into some regulatory troubles or something or lost their private keys in some way, then that could be like disastrous for the network. Because then, you know, you would have centralized points of failures at the network validation level itself. Now, that's not really the case today. But, you know, like if you look at sort of the market share of the various staking providers, I think Lido now has like a third of all ETH staked with them. Sorry, all the third of all the staked ETH is sitting with Lido and like something like 75% of the liquid staked ETH is sitting with Lido. Of course, Lido is a DeFi protocol, they have decentralized validator set. But nevertheless, there are centralized components to it. And so it would be better for the network from a protocol risk standpoint, if, you know, all the ETH weren't sitting with a single operator. So what we saw coming is essentially a growth of liquid staking providers. And we want to help them grow and we want to help pursue this mission of decentralizing the network. So what unshETH does as a core product is when a user comes and stakes their ETH with unshETH, it's as though they're staking their ETH with all the different liquid staking tokens that we support. So unshETH is essentially a diversified basket of liquid staked ETH. So we accept deposits from six different liquid staking protocols. So these include Coinbase, Lido, Frax, Rocketpool, Hanker, and Swell. And essentially, users can deposit any one of these tokens or unstaked ETH. And essentially, they get a basket, which is unshETH, which itself is a single ERC20 token that represents a share of staking in each of these different protocols all at the same time. So that's sort of the core product. Now, we have a couple of enhancements to like, call it a pure index or ETF type product. And unshETH is essentially, you know, a liquidity pool as well as a pure index product. So users can swap between the different LSEs that make up unshETH. And essentially, just by holding unshETH, they earn not only the staking yield, but also the swap fees. So we, you know, essentially unshETH beats the native staking yield by virtue of these swap fees. And then the other feature we have is unshETH is an omni-chain token. So if you look at sort of where all the DeFi activity is happening, although most of the TVL lives on mainnet ETH, a lot of the like newer DeFi protocols and a lot of the like active usage of DeFi happens on Layer 2s and Alt L1s because the gas fees are a lot cheaper. So you get like a lot more innovation and activity there. So what we allow users to do is bridge their unshETH onto Layer 2s and Alt L1s. So we're already live on BNBchain. We launched on Arbitrum just this week. And yeah, we expect a lot of our growth to come from these Layer 2s where, yeah, essentially all the liquid staking tokens that we support aren't already live on all the Alt 2s. So we take care of the scaling for them. So we help grow their liquidity, aggregate it, scale it to millions of new users who wouldn't have, you know, staked their ETH otherwise. Yeah, super cool. I think your omni-chain strategy will definitely be a big driver of LSDFi. To your point, the gas fees on Ethereum are just sometimes too prohibited for the average retail users. But, you know, going back to your mission of promoting validator decentralization, you know, people have been sounding alarms on sort of Lido's concentration of staked ETH approaching that 33% threshold, which can be risky for a network system. How exactly does your, I guess, ecosystem promote that decentralization and shift towards other LSD tokens? Is it through a governance bribe system or how would that work? Yeah, it's a good question. So essentially, every token that's supported by unshETH has a target weight and a maximum weight. So essentially, all deposits and swaps that increase the weight of an LSD up to its target weight are essentially free for users to make. Any deposit or swap that takes the share of an LSD or the weight of an LSD in unshETH above its target weight, there's a small fee that's charged that scales dynamically the further away from target weight you get. And then, yeah, like no swaps or deposits are allowed above the maximum weight. So essentially, what this means is that we essentially charge people to put more in of an LSD than sort of our target weights. And yeah, like it can never exceed its maximum weight in unshETH. So now, in terms of how these weights are set, we initially started with the four largest LSDs and we simply equal weighted them because we didn't want to influence exactly how the weight setting would go. Now, as we're adding more and more LSDs, what we're going to do, and we're in the process of doing this now, is we're essentially transitioning to a system where our governance token, us, or the state form of it will be used to govern the composition of the unshETH index. So essentially, the way it'll work is it's a two-step process. So essentially, newer LSDs will be able to apply for being whitelisted into unshETH. And once they're whitelisted, so the whitelisting criteria is primarily a risk-based criteria. So essentially, it has to be an LSD that's already been live, has a certain amount of CBL, has withdrawals live, is secure, all that good stuff. It can't just be an LSD that someone made up in their basement overnight, right? So the whitelisting process involves a DAO governance vote. So essentially, the ush takers have to vote on it. And then, the second step of the process is essentially determining the target weights. And again, this right now, we're in the process of setting up the system. But essentially, each VD ush vote will correspond to a share of the unshETH index. So if you think about unshETH as like a plot of land, the VD ush takers essentially own like a part of the land. And they can apportion that land based on how much VD ush they have to each different LSD. And so LSD protocols will be able to either stake ush themselves or participate like you mentioned, like a governance bribe market, which we're setting up now, in order to increase the rate. But I would say this is all subject to, first and foremost, the risk considerations. So it can't be the case that like an LSD that I made up overnight and I can just sort of like buy all the ush tokens and insert myself into the index. That wouldn't make any sense. And conversely, it wouldn't also make sense if, you know, the largest LSD, largest and most richest LSD, like Lido Keyman, bought all the votes and essentially made unshETH to like Lido 99%. That also wouldn't make sense. So we have, yeah, we have some risk guidelines to essentially account for that. Gotcha. Okay. That makes makes a lot of sense. I guess going into the index aspect of it, what is the sort of end goal? Is ultimately, do you think there will be, as more liquid staking protocols emerge, is unshETH just going to increasingly add these new tokens over time and they'll just be one giant basket? Is that the sort of the vision? Yeah. I mean, that's sort of the idea this time. Now there is like, so as far as the technology is concerned, the way we build it is that it's It's essentially infinitely scalable. You could add 100 tokens and it should just work. Now I say should instead of will, because there's one small aspect to it, which is there's a small incremental gas cost that gets added to the deposit and redemption functions every time an LSD is added, just because you have to account for the weights of every single LSD, which requires like sort of computing every single one. Now that's all like a fairly small consideration in the grand scheme of things, and we have upgrades in progress to address that as well. But yeah, the way I'm thinking about it is that the core on-sheet index will probably have, you know, right now we have six, let's say we'll probably scale to like 10 different LSDs in the next, or 10 different LSDs are eligible for inclusion in the on-sheet index over the next couple months. And then, yeah, we'll just have a governance-driven process to determine who gets to share that index. But now what happens if there's like, you know, 50 different LSD protocols, right? That all want like, you know, 0.1% of on-sheet. So we have an idea for this, which is, I think it makes sense to sort of keep like the core on-sheet index, the core on-sheet token, you know, it's going to be like a billion dollars in TVL. And like, we're going to have like institutional players who want to stake their ETH with on-sheet. Maybe they won't be so comfortable with like the long tail of LSD providers because the marginal diversification benefit beyond like... So when you have a number of like relatively uncorrelated assets, so they're correlated on price, but they're uncorrelated on the protocol risk, of course. So when you get above like seven or so, like the marginal diversification benefit that you get is like de minimis from like a portfolio construction standpoint. So I don't think like you're getting much diversification benefit beyond that. So what we're thinking of doing is sort of tranching the on-sheet product. So maybe there's like a different on-sheet basket that has like the long tail LSD providers, as well as like structured products built on top of ETH. So anything that's pegged to ETH that provides an APR that's competitive with ETH staking yield would be eligible for inclusion into this basket. So call it BGN on-sheet or something, or like Kickstarter on-sheet. And yeah, you can have all kinds of cool products in here. So you could have LP tokens that are pegged to ETH, you know, like the curve LP tokens that are like convex wrappers, auto-compounded. Basically things with like multiple layers of smart contract risk could be in this like different tranched basket. And then essentially the combination of all of that could go into on-sheet as a single like token. So that way, you know, you're not having to keep track of like, you know, 30 different tokens in the core on-sheet index. And the risk of it is like managed separately. And like weighting of it is managed separately to the larger ones. Gotcha. Yeah, the tranching idea sounds makes sense and it would be really cool in my opinion. Going to sort of the swap side of it, it seems like on-sheet is almost trying to be the curve of LSD5, where users come here and they can swap between any LSD tokens with low slippage. In terms of that aspect, where do you see, I guess, fees scaling over time for the swap side? Yeah, so I think this is an interesting question because when we first started on-sheet, we weren't going out to, you know, build the best DEX or LSDs or anything like that. It just happened to be the case that it made sense. So it hasn't been like our number one priority to scale the DEX aspect of it or the fees aspect of it. Not to say that we can't, it's just that that hasn't been the priority. So I guess if you think about, you know, what drives the most volumes in terms of LSD to LSD to ETH, sort of the highest volume pairs are LSD to ETH pairs, not LSD to LSD pairs, although LSD to LSD pairs can be translated into LSD to ETH pairs. It's just another step. So in terms of having large LSD to ETH liquidity, which is what, you know, Curve and to some extent Balancer has focused on, and now Maverick, which is the hottest new DEX, yeah, like the more ETH you have in the index that is not staked, the more essentially swap volume that will run through your DEX. But the downside is any ETH that's in there that's not staked is going to be sort of idle and not like it's not earning the staking yield. So you have to ensure that like any ETH that you put in that's not staked serves the purpose of generating swap fees that's over and above sort of the staking yield that you forego. And I think, you know, if you look at something like a Curve, you know, they're just doing 50-50, right? Like 50% unstaked ETH, 50%, you know, LIDO ETH, and there's like a billion dollars of each of those. And if you look at it, like, you know, the real yield from the swap fees plus the staking yield is worse off than, you know, just if you were to have just pure ETH staking yield. So it's like a tough balance, right? Like so if you look at it from the user standpoint, they're almost better off, you know, just staking their ETH and not even LPEing it. So yeah, you have to sort of strike that balance. And yeah, we're trying to figure that out. Right now we have 5% unstaked ETH and uncheap. But yeah, we'll sort of adjust and see like where what makes the most business sense or what makes what gives the best value proposition for our users. And I think that's how we'll go. That 5% W-ETH just sits there idly and serves mainly for users who want to swap from LSD to ETH. And I think that also is an incremental met redemption fee. Is that correct? Yeah, that's correct. So essentially what we have is if you swap from an LSD to ETH using our protocol, you can essentially, you know, that 5% in ETH essentially serves as exit liquidity for that purpose. And there's a small incremental fee to it. I think it's like 10 basis points or even less at this point. But yeah, I mean, essentially it just serves for the purposes of facilitating those swaps. And at the 5% level, the swap fees easily compensate for the forgone staking yield. Now if it were like 50%, I don't think it would. Right. So if the user wants to unstake their ETH, is that possible through unshETH or do they have to go through the liquid staking protocol itself? Yeah. So direct withdrawals we don't support. What we do support is like instant redemption. So direct withdrawals, you go through the liquid staking provider's website. At the network level, most people can withdraw within 24 hours. Some LST providers provide an exit liquidity in the form of ETH directly through their treasury and others only do that through the curve pool or whatever. So in our case, you know, we can send users to, you know, go exit using the curve pool or go use our 5% ETH to swap out of it. One of the, moving with the conversation a little bit to the risk side, we touched on a little bit earlier with the basket weightings, target weights, dynamic fees, reminds me a lot of the GMX GLP basket composition strategy. But you know, let's say right now you have four or seven or six liquid staking tokens within the basket. Say for example, Fraxseed gets hacked or there's some infinite mint issue and that token goes to zero. For someone holding unsheathed, what's the risk for them? Could you walk through that process? Yeah. So actually it is heavily inspired by GMX GLP. So it's not that it's, yeah, it's not a coincidence. Yeah. Just on that quick point. I mean, I think like it's similar to the GLP spot swap. Not the perps, obviously. But it is like sort of the GM GLP spot swap suffers from a lot of like, call it Oracle based arbitrage that our product doesn't because, you know, essentially it's all a stable swap, not a volatile asset swap. So the like true Oracle price that we determine is based on the like amount of ETH that's staked, that backs each LSD. So that's like a pretty well known quantity. And to the extent it's not well known, it's only because either some slashing occurred that we didn't pick up, or like you said, there's something wrong with the rate and like the LSD gets hacked, right? So yeah, let's say, you know, FRAX went to zero in this case, because of whatever reason, like either, you know, their Oracle gets hacked or like the ETH is gone or whatever. In that case, the maximum risk to unsheathe, yeah, so what would happen? So then it would have to be the case that the, so right now, let's say S-FRAXE to ETH ratio is like, you know, 1.02 to 1. So like 1 S-FRAXE is worth 1.02 ETH. So then what would happen is that in reality, the S-FRAXE is, let's say, worth 1 S-FRAXE is worth like, you know, 0.01 ETH or something, because like 99% of the value is lost. But their Oracle or whatever that we're reading is still reporting 1.02. That would be the issue. So now if it were the case that it went to zero, but also the Oracle reported that it went to zero, there'd be no issue to unsheathe because, you know, we're always looking at the live price. But yeah, let's take the case where essentially it's actually worthless, but, you know, it's being reported as not being worthless. So then what would happen is a user will be able to buy really cheap S-FRAXE on alternate DEX and then deposit that S-FRAXE into unsheathe in order to mint unsheathe and then redeem unsheathe into the basket of, you know, all six or seven LSDs. So then essentially they would be effectively putting in a worthless asset and draining all the good assets, correct? So the maximum risk associated with this operation is limited to the maximum weight of S-FRAXE in unsheathe, because if it were to exceed that weight, we would not accept any more deposits. So that's essentially the maximum risk here. So if, say, S-FRAXE maximum weight were, you know, 25% of unsheathe, and obviously that number is going down every day as we add more and more LSDs, then we get more decentralized. So then the maximum risk would be 25%, so 25% of unsheathe would be lost in the worst case scenario. Got it. Yeah. So, you know, I think this model is great because you limit the tail risk that you have with like an AMM-like curve where the weakest asset can drain the entire pool. But I guess once this haircut happens, that loss is socialized across all unsheathe holders. Is there a way for the protocol to recollateralize? Well, I would say it's not a collateralization issue because we're not overcollateralized or a lending protocol. We're simply a wrapper that sits on top of all these things. So it would still be just redeemable into the basket of underlying assets. Those underlying assets are just worth less. So we're not making any explicit promise to redeem unsheathe at one worth equivalent or anything like that. Got it. Right. I mean, sure, like there might be ways to creatively socialize or recover the value, but it's not a guarantee that's being provided. Got it. Got it. Moving on to sort of the governance side with the USH token, I think the new tokens are added through governance, but you mentioned some internal risk frameworks you do for new LSD tokens. But what stops someone from sort of a governance tack and proposing a random LSD token that's not vetted? Yeah. I mean, ultimately, this is something that we have to consider very carefully as we go through all the syncs. So first thing I would say is that our governance process is not fully on chain. So like the sort of, you know, flash, borrow, USH, and then buy a lot of it and then sort of put in a malicious proposal can't happen because our governance is done off chain with snapshot votes for this reason. So I mean, obviously, the malicious governance proposer would have to, you know, essentially go through the process of, you know, basically accumulating all the governance power, going through all this, and then making a proposal. And even if they were to pass that proposal, it's all off chain. So if it didn't make sense, and they didn't have, like, essentially, you know, access to the multi-sync, they wouldn't be able to, like, enact those changes. That's point number one. Point number two is, like, even if a bad LSD, not a malicious, but a bad LSD, went through governance, not maliciously, but rather, you know, it was a mistake to approve it because it gets exploited a week later or something like that, then, like I said, you know, the tail risk is limited to the maximum weight of the LSD. And we have a rule that says the new LSD can be no more than x% of the index. So it can't, you know, essentially, and just to be clear, that x% is no more than 10% of the TVL of that LSD, and no more than 10% of unsheathe itself. So essentially, any changes that don't, you know, conform to those, like guidelines, wouldn't be able to be pushed through. So yeah, that's basically it. Got it. And is there, you know, I understand, currently, it's multi-sync control, but are there plans to, you know, decentralize governance and move that on chain in the future? Yeah, it's a good question. So when I say control... by Multisig, what it is, is the configurations of adding an LSD to unshETH is protected in the following way. It requires, essentially, a Multisig plus a time lock. So the time lock is required to update the Oracle contract to update the only contract that's allowed to deposit into unshETH, as well as the only contract that's allowed to swap assets between unshETH. So essentially, given the combination of all this, the addition of an LSD is guarded with a 72 to slightly more than 72 hour time lock. The Multisig itself is controlled. So right now, we have a 203 Multisig, like we're about to, or maybe already have, extended it to a 3 out of 4 Multisig, which includes external parties. So it's not just Unsheet core team members. And going forward, as this process gets more and more hardened, essentially, we're intending to expand the core configuration Multisig to a 5 out of 7 or something like that, including several external parties. We just have to make sure we find the right set of people who are available and don't have conflicts of interest. So it can't just be, for example, the head of LIDO or whatever, because then they may not want to sign on for a new LSD being added. So yeah, that's the goal. In terms of moving the governance fully on-chain, I don't think that's feasible near term for two reasons. One, it just adds a lot of risk to a lot of attack vectors around governance attacks, like you mentioned. And then the second thing is we're also allowing users who stake their OSH on the layer 2s where we deploy to participate in governance. And so there's an aspect of omni-chain governance as well, which is very hard to do completely on-chain and also opens up risk vectors if we do make it completely on-chain. Gotcha. Yeah, those are good points. Why don't we briefly just go over the recent exploit? I think things were ultimately resolved, but could you just briefly talk about what happened there? Yep. Yeah, so actually what we had was a security breach. It was not a protocol exploit. So what happened was essentially one of the private keys corresponding to some of our auxiliary contracts that were not the core on-sheet contracts, but rather some of our farms got leaked. And a malicious actor who had been sort of watching for activity around this and sort of preparing himself to do the worst that he possibly could essentially took control of a couple of these contracts. But essentially, given our design, the core TVL was never at risk because that's all under multi-sig plus time lock. And the most that was at risk was essentially undistributed farm rewards of our token. So it was like two weeks of farm rewards. So that's where it was compromised. We got back control pretty much immediately the same day. And yeah, I mean, look, protocol operations were back to normal. The thing I would say there is, yeah, it's unfortunate that it happened. But I would stress that this was a mistake. It was a DevOps issue, essentially. We needed hardened DevOps practices, which we've, of course, since corrected. In fact, we'd already corrected most of this over the last month and built a more robust development pipeline. But some of our legacy code was still in there. And that's what caused this. It was like a commit from a month and a half ago. But anyway, it's all over now. We're basically past it. Protocol is back to fully normal operation. It really never was not in normal operation. And yeah, we will be making a security blog post later this week, just giving the bullet points of what happened, what we changed. Yeah. And then one other thing I would mention is we've also done a full new audit with Paladin, which is one of LaterZero's auditors, very sharp guys. And essentially, we'll be releasing that full audit as well later this week. But again, like I said, the core protocol, the smart contract side was always secure and continues to be secure. And nothing's, you know, it's always been smooth. Yeah, there was a DevOps issue, which is unfortunate. But, you know, we thought we were past it. Yeah, that's definitely good to know. Yeah, and then, you know, the second audit will be really nice as well to add to Protocol's security. Why don't we, you know, just jump briefly now to some of the more exciting parts of Unsheath with the yield opportunities? Could you just, you know, maybe go through some of the opportunities that you can, or different ways you can earn yield through the unshETH protocol? You know, you have the unshETH yield itself from staking and swap fees. You have these partner farms with Balancer, PancakeSwap, Maverick, and then you have, you know, VDUSH. So yeah, maybe just could you just walk through those different yield opportunities? Of course, yeah. So let's start from the perspective of a user that has ETH, right? And they're looking for the best yield on their ETH. So what you can do is you can essentially stake your ETH with unshETH by just depositing it on our website. And essentially what happens in the background is it'll get routed to mint or swap into the LSD that is, you know, the furthest away from its target weight in unshETH. And then it gets deposited into unshETH and mints unshETH, essentially corresponding to the equivalent of one ETH. So I think, you know, since we launched the current version of unshETH two months ago, it's accrued like 1% in staking yield plus swap fees. So basically if you deposit one ETH, you'll get like 0.99 unshETH or something similar. So now that unshETH, by simply holding it in your wallet, you'll be earning staking yield plus swap fees, essentially corresponding to like, call it like one or 2% above the ETH staking yield right now. Then what you can do with that unshETH is you can use it in a number of DeFi integrations that we have already. But yeah, like the latest thing that we launched is actually growing on Arbitrum. So you can actually take that unshETH that you minted on Ethmainnet, bridge it over to Arbitrum and deposit it or stake it into our single-sided farms, which, yeah, right now I think it's like a 50% APR in usher missions because we just launched this farm yesterday. So if you're one of the early ones in there, you can sort of, yeah, stake your unshETH into that farm and earn usher missions as we're bootstrapping our growth on Arbitrum. The other thing you can do is you can also LP unshETH with ETH on Maverick, on Ethmainnet. So that's, Maverick is this hot new DEX protocol. They just announced their token today. I'm expecting some sort of retroactive reward to protocols and farmers who are on there early. So it's definitely an interesting spot to go provide liquidity and earn some yield. Other opportunities that we have are on Arbitrum. In particular, we launched this partnership with Timeswap, which is a lending protocol where you can get a liquidation-free loan against your unshETH. So the way this thing works is if the price of ETH fall, essentially, the economics of this is structured such that if you go borrow against your unshETH and the price of ETH falls below 16.50, you'd be better off having borrowed USDC choosing unshETH than holding ETH itself. So I did that, and that's pretty cool because you never know what price of ETH is pretty close to 16.50 at this point. So that's an interesting opportunity. And then on the governance and OSH side, if you're interested in participating in the governance of the future of unshETH, then you can, of course, stake your OSH tokens or provide liquidity of OSH against ETH or unshETH. And essentially, you can stake that for VD-OSH, which is essentially our governance voting power token. So yeah, these are the set of opportunities. We're gonna be launching a lot more on Arbitrum in the coming week. Yeah, we're gonna have an announcement going out tomorrow. Yeah, we're gonna be launching these liquidity pools and on Camelot. It's gonna be very exciting. So I would say, yeah, mint unshETH, bridge over to Arbitrum and see what the exciting opportunities are. Nice, yeah, definitely a lot going on on the yield sides. And I think you alluded to this earlier, but there could be possibility of maybe OSH wars where protocols buy OSH to direct incentives. Do you see there eventually being a bribe marketplace? Yeah, so we're building a bribe marketplace. That's like that we're already doing. So it's just a matter of scaling it. So it wouldn't make sense to launch a bribe marketplace where there's only four LSE protocols like competing for it. So first we wanna scale the number of LSEs that we support. We wanna scale our TVL. So like there's value proposition to having a spot in unshETH. And we wanna scale our DeFi utility. So essentially, it's not just a LSE wrapper. It's like something more exciting than that. So that's why we're launching on Arbitrum and we're scaling new LSE protocols. Yeah, I think the governance bribe marketplace should be up like later this month or early next month. And then yeah, OSH wars will be great for us, obviously. We already have a couple of protocols that are like signed up to try to accumulate OSH. There's this one called Gusher, which is pretty interesting. Plus there's a number of like auto-compounder lending protocols that are sort of been engaging in conversations to try to accumulate OSH in order to grow their voting power. We'll also have another utility to the OSH token, which is that, or like another set of things you could potentially bribe for, which is that in order to grow unshETH liquidity, I mean, in my mind, like all state deep liquid state deep should be replacing native deep in like almost all DeFi applications. Now we would prefer for that to be unshETH. Right now, I think Lido has already made some inroads here, but I think it would be great if, next time someone launches a Pepe fork, they pair it against unshETH instead of it. And that I think is really the way to grow utility. Or like you have an NFT mint, you could be minting it with unshETH instead of it. I mean, there's no reason why like, you know, liquid state deep can't be the base layer asset. So essentially we have a way, we're developing a marketplace where essentially users can, or protocols can pair against unshETH, help grow our liquidity in exchange for OSH incentives. And the degree of OSH incentives they would receive is proportional to the voting share they get for that particular pool, which would be governed by a governance marketplace, so this is something that we're building again, like next month or two. Awesome, awesome. Yeah, it leaked a lot of alpha there on some of the future plans for unshETH. Definitely really exciting to hear. You know, just lastly, is there anything else upcoming to Roadmap? I think you've already talked about a lot of it that users should know about. Yeah, I think I leaked enough there. The only other like pathway for expansion that wasn't previously mentioned is, yeah, look, there's a lot more layer tools than just our mineral. And a lot of them with driving LSD5, liquid staking ecosystems that are up and coming, using new technologies, that, yeah, that's all I'll say for now. Okay, great. Well, yeah, that's all the questions I had. We can open the question, we can open it up to the community now if there are any questions. Not the community here, but I would love to hear sort of from the exponential DeFi perspective of, yeah, sort of like what it looks like to integrate unshETH with you guys and sort of, yeah, how are you guys, you know, what's your role in this ecosystem? Yeah, yeah. And I think one actually raised their hand as well. Yeah, so, you know, for us, we're served to be, you know, we want to be a respected voice in DeFi in terms of risk assessment. That was our initial goal. And, you know, our second goal is to just simplify the DeFi investment process. You know, as many of us degents know, the initial learning curve to get ramped up into DeFi is, I would say, pretty steep. You have to learn how to bridge different chains, you have to learn Metamask, read different contracts, et cetera. And so at Exponential, we're really trying to simplify that whole process into, you know, just a few clicks and you can invest in any DeFi pool across chains. You know, right now we're in live beta for our invest for early users. And then, you know, in terms of integrating unshETH, it's a process. We've, you know, we've covered protocol, but, you know, it'll take, I think, you know, it'll take a little bit of time to get the actual pool to be investable, but we will eventually list, you know, all the unshETH pools as well. Yeah, I don't see any other questions. So I think we can call it, we can wrap it up here. Thanks Wagame for this conversation. It's real insightful. Definitely learned a lot about unshETH. Thanks everyone for joining.