Looping strategies on Aave just got more rewarding.
Following the approval of TIP 12, Treehouse is launching a new incentives campaign for tETH on Aave Prime, with up to 400,000 TREE allocated in Community Rewards.
From 28 September to 3 December, users who supply tETH as collateral and borrow wstETH against it can earn up to 0.5% APR in TREE, lowering the effective cost of borrowing wstETH on Aave Prime.
Funded through the Community Rewards token allocation, this campaign builds on tETH’s growing utility across lending markets and directs Community Rewards toward deeper adoption of Treehouse’s tAssets across DeFi.
About the Campaign
From 28 September 2026, 11:00 UTC to 3 December 2026, 14:00 UTC, eligible tETH positions on Aave Prime can earn TREE rewards, with distribution powered by Merkl, an onchain rewards distribution infrastructure.
To participate, users simply:
- Supply tETH as collateral on Aave Prime
- Borrow wstETH against their tETH position
Eligible positions opened during the campaign period are automatically tracked onchain.
Rewards are distributed using a Capped Reward Rate at up to 0.5% APR in TREE, earned on top of the position’s own yield. Your TREE rewards are calculated based on the amount of tETH collateral supporting your eligible wstETH borrow. The more collateral your borrow uses, the more you earn.
Rewards accrue automatically and can be tracked on-chain and claimed anytime through the Merkl dashboard.
With TREE incentives, borrowing wstETH on Aave Prime becomes a more cost-efficient alternative to borrowing wstETH or ETH on other major lending markets. This makes it a prime opportunity for users building looping strategies or seeking more efficient ways to deploy their ETH exposure across DeFi.
View the opportunity on Merkl and participate in tETH strategies on Aave Prime.
What Is tETH?
tETH is Treehouse’s liquid staking tAsset for Ethereum, designed to enhance ETH staking yield through Market Efficiency Yield (MEY) while remaining liquid and composable across DeFi.
Through a rate arbitrage strategy, tETH captures differences between Proof-of-Stake rewards and DeFi lending markets to add an additional source of yield for holders while contributing to greater interest rate convergence across DeFi.
Beyond earning yield, tETH can be deployed throughout DeFi. On Aave Prime, for example, users can supply tETH as collateral and borrow against their position, creating additional opportunities to deploy capital without giving up their underlying tETH exposure.
Read more about how tETH revolutionizes DeFi yield in our blog, Branching Out 4.
What Is Looping?
Looping is a lending strategy that uses supplied collateral to borrow additional assets, which can then be redeployed to increase exposure to an underlying position.
In a traditional looping strategy, users repeatedly borrow against supplied collateral and redeploy the borrowed assets, cycling through multiple rounds to build up leveraged exposure.
For tETH on Aave Prime, the strategy begins by supplying tETH as collateral and borrowing wstETH against it. Because tETH and wstETH are two closely related Ethereum staking assets, this pairing is the natural starting point for building leveraged exposure.
While a full looping strategy may involve repeatedly redeploying borrowed assets and borrowing again, this campaign does not require users to complete those additional steps. Supplying tETH and borrowing wstETH during the campaign period is all it takes to qualify for rewards.
This creates a straightforward way for tETH holders to deploy their position in one of DeFi’s established lending markets while earning additional TREE incentives during the campaign.
Why TREE Rewards?
TREE is the native token of the Treehouse Protocol, connecting governance, ecosystem incentives, and participation in Treehouse’s benchmark rate infrastructure.
Through Decentralized Offered Rates (DOR), TREE also aligns participants contributing to decentralized benchmark rates designed to support fixed income markets in digital assets.
TIP 12 enables Community Rewards to be directed toward initiatives that expand the Treehouse ecosystem. For this campaign, up to 400,000 TREE is being deployed to encourage greater use of tETH on Aave Prime and reward users actively putting tETH to work across DeFi.
As tETH becomes more deeply integrated across lending and liquidity markets, these incentives help expand its utility while strengthening the broader tAsset ecosystem.
Learn more about TREE and its full utility.
Onchain Reward Distribution Powered by Merkl
Reward distribution is powered by Merkl, an onchain distribution infrastructure that provides transparent, verifiable onchain tracking throughout the campaign.
Eligible tETH supply and borrow positions are tracked automatically, allowing TREE rewards to accrue automatically without manual snapshots.
Users can monitor their accumulated TREE rewards and claim them directly through the Merkl interface at any time.
Expanding tETH Across DeFi
The tETH Incentives campaign on Aave Prime is another step in Treehouse’s broader commitment to deepening tETH’s utility and integrations across DeFi.
As tETH’s DeFi integrations continue to mature, Treehouse will continue exploring new opportunities for users to deploy tETH across lending markets, liquidity venues, and other DeFi primitives.
Each new integration makes tETH more composable and creates more ways for users to deploy their tETH positions, advancing Treehouse’s vision of a more liquid, efficient, and capital-efficient fixed-income ecosystem across DeFi.
Roots run deep. Put your tETH to work on Aave Prime.🌳
Frequently Asked Questions (FAQs)
Q: What is the tETH Incentives campaign?
A: The campaign distributes up to 400,000 TREE to eligible tETH positions on Aave Prime. Users who supply tETH as collateral and borrow wstETH against it earn up to 0.5% APR in TREE, on top of their position’s own yield.
Q: When does the campaign run?
A: The campaign runs from 28 September 2026, 11:00 UTC to 3 December 2026, 14:00 UTC.
Q: How do I participate?
A: During the campaign period, simply:
- Supply tETH as collateral on Aave Prime.
- Borrow wstETH against your tETH position.
If your position meets the campaign’s eligibility requirements, it will automatically begin accruing TREE rewards.
Q: Do I need to complete multiple looping transactions to qualify?
A: No. While looping can involve repeatedly borrowing and redeploying assets to increase exposure, no additional looping steps are required for this campaign. To qualify, you need to supply tETH and borrow wstETH in an eligible position during the campaign period.
Q: How are TREE rewards calculated?
A: Rewards are calculated based on how much of your tETH collateral is used to support your wstETH borrow. The more tETH collateral your borrow uses, the more you earn.
Q: Why is the reward rate “up to” 0.5%?
A: The campaign uses a maximum APR. If participation grows faster than the budget can support, the rate adjusts down pro rata so rewards last for the full campaign period.
Q: Do I need to do anything besides holding my borrow position?
A: No. Once opened during the campaign period, TREE rewards accrue automatically for as long as the position is held.
Q: Where do I track and claim my rewards?
A: Rewards are claimed directly through Merkl.
Q: What network does this campaign run on?
A: The campaign runs on Ethereum.
Q: Can positions be withdrawn before the campaign ends?
A: Yes, positions can be withdrawn anytime. Rewards accrue only while an eligible position is held during the campaign period.
About Treehouse 🌳
Treehouse, the decentralized arm of digital assets infrastructure firm Treehouse Labs, is building the fixed income layer for digital assets.
Treehouse Protocol develops fixed income products and infrastructure across chains through tAssets, a new class of liquid staking tokens designed to support on-chain interest rate convergence while remaining liquid and composable across DeFi.
Treehouse is also developing Decentralized Offered Rates (DOR), a consensus mechanism for decentralized benchmark rate setting that provides the foundation for a broader range of fixed income products in digital assets.
Together, these products are designed to bring more structured and transparent fixed income markets on-chain for both individual and institutional participants.
Website: https://treehouse.finance
Discord: https://discord.gg/treehousefi
