TL;DR: Treehouse Protocol’s tETH Vault reached 12,000 ETH in total value locked (TVL)—over $28 million—within just four hours of its launch. This milestone is an exciting early signal of what’s to come, with plans to increase the vault cap in the next couple of weeks, creating further opportunities for DeFi participants.

At Treehouse, we’re focused on building the fixed income layer for digital assets.

The launch of tETH, our first tAsset, is a significant first step toward this vision. The strong demand reflected in the rapid growth of our TVL underscores the need for more transparent and unified rate-setting mechanisms to address the current fragmentation in the market.

The success of tETH paves the way for future tAssets, driving the evolution of a decentralized and resilient fixed income market in DeFi. This foundation will support the eventual rollout of Decentralized Offered Rates (DOR), a benchmark rate-setting consensus mechanism designed to enable a new class of fixed income products.

tETH: “Liquid Staking Token 2.0”

In Branching Out 3, we discussed the fragmentation of interest rates across DeFi and the need for convergence to create an efficient fixed income market. tETH addresses this by driving interest rate convergence, offering users more stable and predictable returns through interest rate arbitrage.

Building on that, in Branching Out 4, we explored how tETH is more than just another wrapper or Liquid Restaking Token (LRT). It reshapes the liquid staking landscape by enabling users to earn real yield beyond Ethereum’s Proof-of-Stake (PoS) rewards. By optimizing liquid staking tokens (LSTs) and leveraging interest rate arbitrage, tETH generates additional real yield—what we call “Market Efficiency Yield.” This approach benefits individual users and the broader market by aligning borrowing and lending rates with Ethereum’s staking rate.

Yielding with Lido

At Treehouse, we prioritize working with trusted and proven partners, which is why we integrated stETH into our tETH strategy. Lido, as the leader in the liquid staking space, was a natural fit. This integration offers our users access to reliable staking assets while enhancing tETH’s yield optimization capabilities.

By collaborating with Lido, we are bridging the gap between staking rewards and lending rates, aligning with our mission to make on-chain interest rates more efficient and accessible. As we continue to refine and expand our protocol, we expect tETH to become a significant player within the Ethereum ecosystem, with more integrations and improvements on the horizon.

Vault Cap Expansion

We want to extend our thanks to everyone for helping us hit our initial cap of 12,000 ETH so quickly. This strong response highlights the excitement around building the decentralized fixed income layer with us. While the cap is currently fixed, this is just the beginning. In the latter half of September, we’ll be raising the vault cap, creating more opportunities for users to participate as we continue growing the Treehouse ecosystem.

Stay Updated

The success of the tETH Vault is just the start of an exciting journey. As we gear up for the next cap expansion and beyond, there’s much more to come. Follow our progress and check out our documentation for a deeper dive into how tETH is transforming the DeFi landscape.