Aave proposes tETH collateral for its Prime instance

What happened

Aave governance created proposal 329 to list Treehouse tETH as collateral in the Ethereum Prime instance.

What changed

Execution would add tETH strategy, redemption, oracle, liquidity, and restaking dependencies with a 20,000-token supply cap and a tETH-to-wstETH e-mode.

What did not change

The proposal record does not by itself establish execution or make tETH an approved Ketju asset.

Confirmed

• The proposed tETH supply cap is 20,000 and borrowing of tETH is disabled.
• The proposed base LTV and liquidation threshold are 0.05% and 0.1%.
• The tETH/wstETH e-mode proposes 92% LTV and 94% liquidation threshold for tETH collateral.
• Pricing uses a capped tETH/wstETH/USD oracle with a 4.5% maximum yearly growth rate.

Still open

• The final execution state and effective reserve configuration.
• tETH redemption, strategy, and liquidity behavior during stress.
• Oracle-ratio and price-cap behavior if the underlying strategy underperforms.
• The concentration and counterparty risks embedded in tETH.

What it means for an advisor

• Review tETH's strategy, redemption, oracle, and liquidity dependencies before treating the Prime listing as acceptable.
• Verify executed caps and e-mode state and keep tETH outside Ketju approval absent separate asset diligence.