[unshETH] [FINAL] [STIP - Round 1]


Applicant Name:

unshETH Core Team

Project Name:


Project Description

The unshETH protocol is a novel DeFi primitive that promotes validator decentralization by fostering competition among ETH liquid staking protocols with the aim of bringing the best ETH staking experience to millions of users. The unshETH Ether token represents a diversified liquid staked ETH basket that earns both Ethereum staking rewards and swap fees generated by the unshETH vdAMM, all wrapped in a single ERC-20 token. This innovative token/protocol design unlocks the highest “real yield” opportunity for DeFi users. unshETH’s native real yield that users earn simply by holding the token is:

unshETH Real Yield APR = ETH Staking APR + Swap Fee APR + Mint/Redeem Fee APR

unshETH Ether is also an Omnichain token that can be transferred seamlessly across ETH Mainnet, BNB Chain, and Arbitrum via LayerZero. This means that just by holding unshETH, on Arbitrum or any other chain, a user will experience higher yields than natively staking or holding standard Ethereum liquid staking tokens.

The successful launch of the unshETH protocol, and expansion across multiple networks, has been beneficial not only to users but also to liquid staking protocols themselves. By participating/collaborating with unshETH LSD protocols are able to tap into the most incentive-efficient method of acquiring “sticky” TVL and capital-efficient on-chain liquidity currently available in Defi.

Team Members and Qualifications:

Alta1r - Founder

Wagmi - Protocol Lead

Medusa - BD Lead

Project Links:






Contact Information


EIP_Medusa, littlefishwagmi, EIP_Alta1r


@ wagmi33, @ medusa459, @ EIP_Alta1r


wagmi@unsheth.xyz, medusa@unsheth.xyz, alta1r@unsheth.xyz

Do You Acknowledge That Your Team Will Be Subject to a KYC Requirement?:



Detail the requested grant size, provide an overview of the budget breakdown, specify the funding and contract addresses, and describe any matching funds if relevant.

Requested Grant Size:

375,000 ARB

Grant Breakdown:

This grant will be used to enhance the unshETH protocol’s existing incentive programs on the Arbitrum network. To date $300,000 worth of USH tokens have been allocated for incentives on Arbitrum, to good effect. The ARB tokens requested now will be allocated to the most highly effective current incentive programs, such as farm rewards for single sided unshETH, pool rewards on Arbitrum DEXs’ for liquidity for unshETH-ETH, as well to new high-value liquidity pool rewards and new collaborative incentive programs with partner protocols to encourage adoption of unshETH and advance the nascent LSDfi ecosystem on Arbitrum. The unshETH protocol will allocate an additional 1,000,000 USH tokens for use as incentives on Arbitrum, to be distributed alongside the ARB token grant.

The proposed incentive program can be broken down into three categories:

  1. Incentives distributed via the unshETH protocol dAPP
  • Incentives directed to single-sided unshETH dAPP farm. When first launched on Arbitrum, unshETH quickly gained $3m staked ETH tvl bridged into Arbitrum via incentivizing this farm. This TVL has remained “sticky” and is now the protocol’s most incentive-efficient program. It is believed that dual ARB and USH incentives will result in $5-10M in interest-bearing ETH tvl being bridged into the Arbitrum ecosystem and deposited here.
  • Incentives directed to unshETH dAPP farms for other unshETH protocol offerings. Including reshETH, vdUSH, and future deployments.
  1. Incentives distributed via DEX protocols for liquidity mining
  • Incentives directed to unshETH-ETH liquidity providers. It is believed that dual ARB and USH incentives will result in $3M in liquidity across this pair being made available to traders on Arbitrum (removing the need to pay high gas fees to bridge from mainnet) and enable the next round of unshETH token integrations into partner protocols which require on-chain liquidity.
  • Incentivizes directed to a net-new unshETH-ARB liquidity pool. Part of unshETH’s commitment to supporting the Arbitrum ecosystem.
  • Incentives directed to various net-new unshETH-[gov_token] pools in collaboration with ecosystem partner protocols to establish unshETH as a performant base layer asset for liquidity on Arbitrum.
  1. Incentives distributed via current and future non-dex partner protocols dAPPs
  • These incentives will enable increased unshETH-based Defi utility on Arbitrum.
  • Incentivizes directed to lending protocols (borrow against unshETH collateral, lend unshETH).
  • Incentivizes directed to perpetuals and other derivatives protocols (open leverage positions with unshETH collateral):
Distribution Method Total ARB Total USH Split
Incentives distributed via the unshETH protocol dAPP 125,000 333,333 1/3
Incentives distributed via DEX protocols for liquidity mining 125,000 333,333 1/3
Incentives distributed via current and future non-dex partner protocols dAPPs 125,000 333,333 1/3

Funding Address:

Funding Address Characteristics:

2/3 Multisig

Contract Addresses:




  • Grow unshETH on Arbitrum using our existing liquidity incentive programs
  • Bring new LSTs that haven’t launched on Arbitrum on to the network
  • Unlock the next cohort of Arbitrum ecosystem protocol integrations via increased liquidity and availability
  • Embrace the use of unshETH as a core DeFi primitive across the Arbitrum ecosystem, replacing non-yield bearing ETH

Key Performance Indicators (KPIs):

KPI Success
Increased unshETH ETH tokens bridged and circulating on Arbitrum >$10M total unshETH ETH value bridged to Arbitrum
Increased unshETH-paired liquidity on Arbitrum dexes >$3M total unshETH-paired liquidity on Arbitrum
Onboard new LSTs to Arbitrum Onboard 1 New LST to Arbitrum. This will be measured by adding one or more new LST to the unshETH basket
Integrations with Partner Protocols on the Arbitrum Network Partner with 4+ lending protocols on Arbitrum to use unshETH as a collateral and borrow asset.
Accelerate the next stage of LSDfi innovation on the Arbitrum Network Assist GTM strategy and execution of 3 net-new LSDfi protocols to the Arbitrum Ecosystem, integrating or building on unshETH protocol infrastructure/assets

How will receiving a grant enable you to foster growth or innovation within the Arbitrum ecosystem?:

  1. Bringing LSTs to Arbitrum

unshETH has played a pivotal role in bringing Liquidity Staking Tokens (LSTs) to the Arbitrum Ecosystem. Starting in Q2 2023, unshETH successfully facilitated the integration of Swell’s swETH and Ankr’s ankrETH into the Arbitrum ecosystem, allowing millions of users to access these assets for the first time. Building upon these achievements, unshETH is poised to launch Stader’s ETHx on the platform just two months after its launch. This deployment, scheduled in the upcoming weeks, will make ETHx readily available to Arbitrums vast user base, extending its reach to millions of Arbitrum users.

Update 10/4: It has been exciting to see that since unshETH published this proposal there has been a notable increase in bridging and usage of unshETH ETH on Arbitrum. Over the past week the TVL of unshETH on Arbitrum has increased by over $1 million, hitting an all-time high, and the percentage of all unshETH ETH being held on Arbitrum has also hit an all-time high.

  1. Growing the Arbitrum User Base

unshETH is dedicated to harnessing the incentives available to us in the most effective manner, with the goal of expanding the user base within the Arbitrum ecosystem. Since the launch of unshETH on Arbitrum, the protocol successfully accrued over $1 million in on-chain liquidity over a span of four months. While this initial liquidity growth showed promise, it eventually reached a point of stagnation due to diminishing rewards. However, it is worth noting that once users have experienced the remarkable power and efficiency of the Arbitrum ecosystem, they have been inclined to remain within it rather than returning to Ethereum or bridging to other networks.

We hold a strong belief that by offering additional incentives, we can not only bolster the liquidity of unshETH but also attract more users and foster sustained sticky liquidity within the Arbitrum ecosystem.

Additionally, unshETH has been a proponent of driving community engagement within the Arbitrum ecosystem. A list of our twitter spaces and events with Arbitrum ecosystem partners is listed below:

Twitter Spaces - Our Spaces with Arbitrum Received over 1,500 live listeners

  • Arbitrum Happy Hour
  • unshETH x Arbitrum Happy Hour
  • Arbitrum Happy Hour with unshETH
  • Arbitrum Happy Hour

Events - Our in person events brought Arbitrum enthusiasts together across the globe

  • unshETH Sponsors ETH Waterloo
  • ETHCC Paris w Vertex
  • Happy Hour in NYC with Savvy

For more information on these Spaces and IRL events see additional links here

  1. Replacing ETH with yield bearing staked ETH throughout Arbitrum Defi through unsETH

While unshETH Ether is the second most liquid form of staked ETH on Arbitrum after Lido wstETH, most ETH on Arbitrum is not natively yield-bearing. We believe that with this grant, we can increase the proportion of ETH on Arbitrum that is staked and yield-bearing. Furthermore, with the recent deployment of our first price-oracle, developed by DIA specifically for Arbitrum, we aspire to diversify the asset offerings available to Arbitrum users, enriching their experience within the ecosystem. Combined with the fact that a significant portion of our ARB grant would be used to incentivize partner protocols, as well as our matching the grant with 1M USH tokens, we believe this will result in a rising tide that lifts all boats, as using other Defi protocols on Arbitrum such as DEXs and lending protocols on Arbitrum becomes more attractive.

  1. Increasing ARB liquidity

As part of growing unshETH, we not only hope to bring users to the Arbitrum ecosystem but increase ARB liquidity. Through incentivising the unshETH-ARB pair we aim to increase ARB liquidity for users in the Arbitrum ecosystem. We believe through this grant we are not only encouraging greater participation but also enhancing the overall liquidity and stability of the complete ecosystem. This, in turn, will spur further adoption of Arbitrum-based solutions.

Justification for the size of the grant:

The unshETH core team identified the grant request size proposed here after reviewing and analyzing it’s past past incentives programs. From that review a plan for the most efficacious future incentive program, enabled by this grant and a further allocation of 1,000,000 USH tokens, was derived. We believe that the projected total impact for Arbitrum Defi is well worth it.

For reference, our previous liquidity mining programs:

  1. BSC: ~$300K in USH token incentives distributed to grow unshETH TVL over 6 months.

  2. Arbitrum: ~$300K in USH token incentives spent over last 4 months.

We believe strongly that the similarly sized grant requested in this proposal will supercharge growth further and enable deeper integration in the Arbitrum ecosystem over the next 4 month. It’s our understanding that based on the recommended guidelines for grant proposals and our history of achieving $4M in TVL and >4 months live on Arbitrum, the maximum unshETH protocol would qualify for is a 750,000 ARB token grant. We believe maximum per-token effectiveness for our incentive program sits at a much lower grant amount of 375,000 tokens.

Execution Strategy:

The funds will be handled by unshETH’s core team to provide incentives as described earlier. To recap, the rewards will be distributed through 3 main channels:

  1. Farm rewards for unshETH ETH staking via the unshETH protocol

  2. Pool rewards on Arbitrum DEXs for unshETH-ETH liquidity and other pools required to support expanded liquidity availability and integrations.

  3. Rewards emitted via partner protocols on Arbitrum to bootstrap and/or accelerate new and exciting integrations

  4. Planned and existing partnerships:

1. Lending and LSDfi: Pendle, Savvy, Dolomite, Abracadabra, Rodeo, Timeswap, Gravita, Equilibrium
2. Perpetuals: Unidex, GMX v2, HMX, Vertex
3. DEX’s: Camelot, Trader Joe, Arrakis, Pancakeswap, Balancer/Aura

Grant Timeline:

Grants will be used within 4 months

Do you accept the funding of your grant streamed linearly for the duration of your grant proposal, and that the multisig holds the power to halt your stream?



Provide details about the Arbitrum protocol requirements relevant to the grant. This information ensures that the applicant is aligned with the technical specifications and commitments of the grant.

Is the Protocol Native to Arbitrum?:

unshETH is multichain and bridged to Arbitrum via LayerZero

On what other networks is the protocol deployed?:

Ethereum Mainnet, BNB Chain

What date did you deploy on Arbitrum?:

May 16th, 2023

Protocol Performance (since launching on Arbitrum):

Overall ETH Staked TVL: ~$10-30M across all networks

Current ETH Staked TVL: ~$10M across all networks

Avg unshETH trading volume: $200-300k/day

unshETH on Arbitrum has been a great success and created excitement and sticky liquidity for our users on the network

Total TVL on Arbitrum: $3-5M

unshETH Bridged to Arbitrum: $2.5-3.5M

unshETH Arbitrum DEX Liquidity: $500K-$1M

vdUSH on Arbitrum: $100-200K

USH Holders: 4,187

unshETH Ether holders: 5600

Protocol Roadmap:

Developing deep, sticky liquidity on Arbitrum is a key strategic initiative in our project roadmap going forward. Additionally we aim to launch unshETH as the base pair for partner projects on Arbitrum ecosystem partners. We’ve recently launched Project Sentience Phase 1 and will continue our rollout over the coming weeks to strengthen our commitment to validator decentralization. Read more here: Link

Audit History:



SECTION 5: Data and Reporting

Is your team prepared to create Dune Dashboards for your incentive program?:

Yes. unshETH has an existing dune dashboard for tracking incentive programs. It will be updated with a dedicated section to track and report relevant KPIs as part of the usage of incentives from this grant. The existing dune dashboard can be found here: https://dune.com/unsheth/unshethxyz

Does your team agree to provide bi-weekly program updates on the Arbitrum Forum thread?

Our team will provide reporting on the progress of achieving our KPIs on the Arbitrum Forum Thread.

Does your team acknowledge that failure to comply with any of the above requests can result in the halting of the program’s funding stream?:



I wholeheartedly support this. A protocol striving to do something different - entirely - and is not a fork. Something unique - striving for validator decentralisation and accommodating LSD-LSD swaps.

The amount is modest so I don’t really see an issue with it at all. Will bring actual value to the chain.


Hello @unshETH.XYZ thank you for your application! Your submission meets all requirements to be considered for a snapshot vote.


Fully support this proposal, UnshETH is a unique protocol enabling a use case that no other protocol does today. We at Timeswap have been long term partners of UnshETH and have worked with their stellar team in the past and look forward to supporting more utility for UnshETH ecosystem assets.


i think it is better to incentivise a basket of LSDs rather than just Lido or Rocket pool alone, the amount seems reasonable given unsheth’s size.


I support this proposal. As strong Ethereum believer, it is important to provide opportunities like this for small investors to get involved in staking Eth to secure the network. Arbitrum lower gas fees is ideal for this purpose.


Right said sir :+1: :+1: :+1:

USH is very unique indeed! I’ve been supporting the protocol from the start and think the function of it will play a crucial part in the LSDeFi narrative.

Much excited.

1 Like

The upcoming LSD narrative will play a major role in the space and I do believe both UnshETH and ARB can strongly contribute to it.


It’s commendable that unshETH is designed as an Omnichain token, allowing seamless transfers across multiple chains, including Ethereum Mainnet, BNB Chain, and Arbitrum. Kudos to you on that.

Can you provide more details about the lending, derivatives, and DEX protocols you plan to partner with on Arbitrum and how these collaborations will benefit the ecosystem?

Hello @unshETH.XYZ ,

Now that your application has been marked eligible, please be advised of the remaining steps in the application process to be completed prior to the Review Period Deadline:

Please complete the following steps required for your application to proceed to Snapshot:

Once you change your proposal title to final, please tag an Arbitrum Foundation Forum Moderator (@ stonecoldpat @ cliffton.eth @ eli_defi) by the Review Period deadline to notify them of your proposal’s readiness.

Once marked as [Final], your application post will be locked by moderators and you will no longer be able to edit your proposal.

@unshETH.XYZ Here is the updated process for changing your title.

To change your proposal to final, please tag an Arbitrum Foundation Forum Moderator (@ stonecoldpat @ cliffton.eth @ eli_defi) by the Review Period deadline to notify them of your proposal’s readiness to proceed from [Draft] to [Final] status.

Once notified, the Arbitrum Foundation Forum Moderator will adjust your title from [Draft] to [Final] status. Once marked as [FInal], your application post will be locked by moderators and you will no longer be able to edit your proposal.

unshETH is a breath of fresh air with their unique design that not only taps on the booming LST narrative, but aims to decentralize it.

We’ve worked with them before and are very impressed by their drive and ability to ship. Arbitrum would definitely benefit from a larger unshETH presence in the ecosystem.

Despite qualifying for more incentives, it’s nice to see them making a reasonable ask, having had prior experience of managing incentive programs of similar sizes.

Full support!

1 Like

Been a follower early on, and happy to see you guys make the ecosystem on Arbitrum as your multichain approach. I have been tracking your schedules and it seems like you guys don’t ever sleep because you building all the time? Dis tru?

What are your next plans?

This is wagmi (protocol lead) from unshETH.

Thanks everyone for the feedback, questions and statements of support! We are super excited to grow unshETH on Arbitrum and establish this as our hub for the next phase of growth. I’m personally super excited by the native Arbitrum community, having been a degen myself. Spent quite a bit of time over the last couple months building deep relationships with the users, builders, and protocols in Arbitrum and really excited about the ecosystem growth the STIP program is likely to kickstart. I think a kickstart here will give a new spark and really believe ARB szn is upon us!

As for unshETH - we think the best way to split the grant is a combo of spending on our internal dapp (as it’s the most proven effectiveness), growing unshETH dex liquidity (classic lst playbook), and most importantly on partner integrations to grow unshETH utility in defi and promote a healthy, thriving ecosystem.

In terms of next steps, our core team has been super focused on developing these bd relationships as well as technical work to enable them - most recently launching the first price oracle for unshETH on Arbitrum (DIA oracle), and soon to be the first protocol to enable zkOracles to enable availability of LST contract rates (e.g. how much ETH is backing unshETH) and staking yields on Arbitrum - this combo will enable unshETH (and other LST protocols) to easily integrate into growing LSDFi protocols on Arbitrum such as various lending protocols, Pendle, etc.

On our ecosystem partnerships - we’re in discussions with a number of partners and have laid the technical groundwork to kickstart them. However, a huge challenge for new protocols and integrations is how to bootstrap liquidity before it’s gained traction. With the ARB grant, we can ease the initial bootstrapping costs of novel integrations using unshETH and prove that using a yield-bearing, staked ETH token in DeFi (whether it’s for borrowing, perps, etc) can be superior to using native ETH.

With the grant size, we chose to pursue a modest amount relative to the maximum we’re eligible for in order to achieve maximum effectiveness in line with our previous incentive programs.


Hello @unshETH.XYZ @wagmi friendly reminded to complete the following:

1 Like

Thanks Matt! @cliffton.eth @stonecoldpat can you please mark the proposal as [FINAL] and lock the thread?


Post has been marked FINAL and locked.


As a long time Arbitrum user, I’m supportive of this proposal. This should help normalise use of staked ETH rather than non yield bearing unstaked ETH as collateral throughout defi. At the same time it will help with decentralisation of validators of Ethereum. The amount requested is reasonable and the proposed use of the grant looks like it will bring benefit to the whole ecosystem.

1 Like

I wholeheartedly agree with this statement and proposal. It will help bring unsheth liquidity up to a point where it can be used in a wider variety of projects such as lending markets. That means we will see secondary benefits down the road.

Spending the ARB now to support an LST that helps ensure greater validator decentralization makes the entire ETH ecosystem stronger. We should be supporting these projects that will have positive long term effects to other projects across Arbitrum.

1 Like