Treehouse Expands tETH Lending Market to Compound V3

Treehouse (TREE) is pushing to expand its market efficiency yield (MEY) strategy for tETH to the decentralized lending protocol Compound V3. On August 26, it unveiled the proposal 'TIP 14: Expansion of tETH Strategy to Compound V3' at the governance forum and began gathering community feedback. The proposal includes integrating the Ethereum-based Compound V3 WETH market as an additional lending and borrowing source for tETH. tETH is a product that earns Ethereum proof-of-stake (PoS) rewards based on liquidity staking tokens (LST), currently utilizing Lido's wstETH. tETH seeks to combine basic staking yields with the MEY strategy to pursue additional profits, borrowing WETH against wstETH collateral and converting it back to wstETH to increase LST exposure. Currently, the MEY strategy utilizes four lending protocols: Aave Core, Aave Prime, Gearbox, and Spark. TIP 14 proposes to add the WETH market of Compound V3, explaining that as the total value locked (TVL) of tETH increases, there is a growing need to add lending protocols with competitive borrowing rates and sufficient liquidity. Even if TIP 14 is approved, the tETH strategy itself will not structurally change, and plans to flexibly allocate capital while maintaining existing collateral and leverage limits. If the proposal passes, the Treehouse protocol will determine the collateral ratio and leverage limits for the Compound V3 WETH market.

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