[MIP-6] Deploy a new market with KelpDAO wrsETH on Mendi

Authors: Mendi Core Team

Title: Deploy a new market with KelpDao wrsETH on Mendi

Type: Mendi Improvement Proposal


Eigenlayer restaking has been the dominant narrative this year in DeFi. EigenLayer has grew from $250 million in TVL to $18.653 billion at the time of writing. KelpDao has been a key player in this growth and the protocol abstracts away all complexity from the end-user and enables easy collaboration between them and EigenLayer node operators. With the launch of wrsETH on Linea, Mendi Finance should deploy a new market in the lending protocol for wrsETH to provide lending and borrowing opportunities with this new and dynamically growing market.

Link to snapshot vote: Snapshot

Proposal Summary

Deploying the wrsETH market will further leverage Mendi’s top position within the Linea ecosystem and capture trading activities around the wrsETH token. It will also enable the Mendi community to gain exposure through wrsETH to EigenLayer restaking rewards and 2x Kelp Miles.

The Mendi core team will be responsible for deploying the contracts, using the standardized deployment process. The market will be deployed using wrapped rsETH due to the fact that rsETH such as stETH is a rebasing token**.** wrsETH will ensure users accrue their staking rewards while participating in DeFi protocols such as Mendi Finance.


The Mendi community will gain considerable benefit from the deployment of the wrsETH market:

  • Mendi will capture the wrsETH market on Linea generating further protocol revenue to be distributed to stakers.
  • Lending protocol users will gain exposure to more EigenLayer restaking rewards and Kelp Miles.
  • KelpDAO has committed to the following:
    • 1x Kelp Miles on wETH supply
    • 2x Kelp Miles on wrsETH supply

Technical considerations

Outline the technical aspects of the upgrade and what are the required development works to implement the proposal if the voting passes.

Expected Timeline

  • Governance Vote: From 05/23 to 05/26
  • Deployment Target: Immediately after vote

Deployment Considerations

The core team will be responsible for deploying the new market.

API3 - Chainlink hybrid price feed will be used to secure the market and the lending protocol.

This architecture will leverage API3 as the primary feed to use Oracle Extractable Value to capture MEV back to the protocol, while any deviation outside of Chainlink thresholds would default the feed to the Chainlink feed, meaning that ultimately Chainlink secures the market. This enables Mendi to capture MEV while also relying on the security provided by Chainlink. The goal with this approach is to leverage API3 technology while also keeping security at the forefront of the protocol by ultimately relying on the oracle with best history of operation.

The methodology behind the price feed will be the same as it was on the ezETH market, using an exchange rate feed. This methodology aligns with the methodology used by Aave on their wrsETH deployments.

Collateral Factor: 70%

Due to the fact that wrsETH is a full market deployment, withdrawals are enabled and has a large global liquidity behind it, the core team proposes to set the collateral ratio at 70%.

Reserve Factor: 20%

Conflict of Interest

There are no conflict of interests regarding this proposal.

Next Steps

Deployment of the market once the vote passes through

References and Links




1 Like
  1. Can you clarify what EigenLayer restaking is and how it has contributed to the growth of the DeFi market?
  2. What is the significance of wrsETH and why is it being deployed on Linea through Mendi Finance?
  3. How will the deployment of the wrsETH market benefit the Mendi community and what exactly are EigenLayer restaking rewards and Kelp Miles?
  4. Can you provide more information on the technical aspects of the upgrade, such as what development works are required and how the API3 - Chainlink hybrid price feed will be utilized?
  5. What is MEV (Oracle Extractable Value) and how will it be captured back to the protocol through the API3 technology?
  6. How does the collateral factor of 70% and reserve factor of 20% for the wrsETH market deployment impact users and the protocol’s liquidity?
  7. Are there any specific metrics or indicators that the core team will be monitoring to determine when on-chain liquidity reaches sufficient levels for the deployment?
  8. What will be the next steps after the deployment of the wrsETH market, and how will the Mendi community be informed and involved in the process?


  1. I would recommend checking the EigenLayer docs https://docs.eigenlayer.xyz/ for more details.
    EigenLayer since its launch grew to 19b in TVL becoming the 2nd largest DeFi protocol after Lido.
  2. Its not deployed on Linea through Mendi, it was deployed on Linea by the KelpDAO team. Its the 4th largest LRT by mcap.
  3. EigenLayer rewards can be exchanged to Eigen token, Kelp Miles will be exhcangeable for Kelp token at TGE
  4. Deploying a market is a standardized procedure. No additional development work is required. The Hybrid feed is an oracle implementation, not major development work.
  5. Check API3 proposal in the forum
  6. Please check docs.mendi.finance on more details. 70% is the amount of value users can borrow against wrsETH. 20% if the share fo interest by wrsETH borrowers going to protocol reserves.
  7. Edited its already at sufficient level. You can see DEX pools on Linea as a reference.
  8. I don’t understand the question here.

The best team forever :blue_heart:

1 Like