# Aave proposes tETH collateral for its Prime instance

> 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.

- URL: https://riadefi.com/on-chain/2025-06-23-aave-v3-prime-teth-onboarding-aip/
- Type: Economic change
- Stage: Proposed
- Evidence: confirmed
- Materiality: material
- Event date: 2025-06-23
- Version: 1, published 2026-08-22 (first published 2026-08-22)
- Follow-up: 2025-07-02
- Advisor-relevant: no
- Affects: Aave v3 (protocol)

## 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.

## Sources

1. [Onboard tETH to Aave v3 Prime Instance](https://app.aave.com/governance/v3/proposal/?proposalId=329) · Aave Governance · 2025-06-23


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Published by Ketju Research on RIADeFi (https://riadefi.com). Educational research for financial professionals; not investment, legal, tax, or compliance advice.