Kelp DAO

Kelp DAO's rsETH is a liquid restaking token backed by a basket of accepted LSTs (e.g. stETH, ETHx), giving diversified restaking exposure with liquidity.

Accepts multiple LSTs as deposits into a single rsETH basket, diversifying underlying staking exposure.

- rsETH (Liquid Restaked Token): Kelp's core liquid restaking token. Users deposit native ETH or supported LSTs (Lido stETH, Stader ETHx) and mint rsETH, a non-rebasing, reward-bearing receipt whose exchange rate versus ETH appreciates as staking and EigenLayer restaking rewards accrue. rsETH represents a proportional share of the pooled, restaked assets and can be used across DeFi. - wrsETH (wrapped rsETH): A wrapped, value-accruing version of rsETH obtainable 1:1, used for DeFi integrations and cross-chain deployments where a non-rebasing wrapper is preferred. - EigenLayer restaking layer: Kelp routes deposited assets into EigenLayer, delegating to professional node operators who restake across multiple Actively Validated Services (AVS) such as EigenDA, Lagrange, eoracle and others, earning restaking rewards on top of base ETH staking yield. - Gain vaults (agETH, hgETH): Actively managed strategy vaults under the Kelp/Kernel umbrella. Airdrop Gain (agETH) bridges deposits to partner L2s (e.g. Scroll, Linea) to capture airdrop upside alongside staking/restaking yield; High Gain (hgETH) targets risk-adjusted returns via professional management. - LRTOracle / pricing contract: Internal oracle contract that sets the rsETH/ETH exchange rate by dividing total minted rsETH by the ETH-denominated value of underlying assets. stETH is priced 1:1 to ETH (hardcoded) and ETHx is derived from Stader's StaderStakePoolsManager; a Chainlink feed provides secondary market pricing.

- Smart Contract: rsETH relies on complex deposit, oracle and withdrawal contracts plus off-chain (AWS Lambda) automation for undelegation. Audits found no criticals but issues required fixes, and LlamaRisk flagged the absence of an active bug bounty at review time and limited public GitHub visibility. - Reserve / Depeg: The LRTOracle hardcodes stETH at 1:1 with ETH; if stETH (or ETHx) depegs, an arbitrageur could deposit the cheap asset and withdraw unaffected collateral, and the basket design socializes one asset's depeg across all rsETH holders. rsETH itself traded at roughly -1.5% discount during April 2024 market stress. - Oracle: Exchange-rate integrity depends on the internal LRTOracle and permissioned price updates (ETHx rate sourced from Stader's contract; secondary Chainlink feed with 24h heartbeat). Faulty, stale or manipulated feeds could misprice mints and withdrawals. - Counterparty: Restaking runs through EigenLayer and a small set of professional node operators (e.g. Kiln, Allnodes, Luganodes) delegating to multiple AVS. Failure, downtime or (once live) slashing at EigenLayer/AVS/operator level flows through to rsETH. - Governance: At the LlamaRisk review no DAO existed; the protocol was controlled by a 6/8 admin multisig and a 2/5 manager multisig plus a 10-day timelock, with upgrade, oracle and operator powers concentrated in the team — a centralization and key-management risk. - Collateral: Accepted collateral is concentrated in a few LSTs (stETH, ETHx) subject to deposit caps; ETHx is issued by the founders' own Stader platform, creating correlated exposure between the collateral issuer and the protocol operator.

- Structured yield / fund-of-funds note: similar — rsETH is a single, tradable instrument that pools an underlying basket (multiple LSTs plus restaking exposure) and passes through blended yield, similar to how a structured note or fund wrapper packages diversified income streams into one holding.; differs — rsETH is non-custodial, on-chain, transferable 24/7 and usable as DeFi collateral; there is no NAV administrator or redemption desk, and withdrawals are subject to protocol/unbonding delays and smart-contract and depeg risks rather than credit intermediaries.