Rocket Pool has asked Aave governance to take rETH out of a proposal aimed at tightening risk on the Aave V3 Core market and to assess the token on its own under Aave’s Risk Framework. The request was posted in response to an ARFC centered on repositioning Core around established and liquid collateral.

Rocket Pool said it supports Aave’s broader goal of reducing risk on Core, but argued that rETH should not be grouped with assets the proposal is trying to address. According to the team, rETH is a standard liquid staking token backed by staked ETH and verifiable on-chain, without restaking, leveraged wrappers, derivatives, or bridge exposure.

Rocket Pool’s case for separate treatment

In its submission, Rocket Pool said rETH does not match the structural characteristics that motivated the wider freeze discussion. The team described the token as an established liquid staking asset rather than a leveraged or more complex product and said it should therefore be evaluated independently rather than within a broad risk-reduction package.

Rocket Pool also said it is prepared to participate fully in a dedicated review and specifically noted that it would be willing to work directly with LlamaRisk as part of that process.

Usage on Aave Core remains meaningful

The team said rETH currently supports about $82 million of collateral on Aave Core across 317 borrowing positions. It also stated that roughly nine times as many rETH tokens are supplied as cbETH on the market, presenting that comparison as evidence of established demand.

According to Rocket Pool, supply has remained steady through market stress this year and the asset has been sitting at its 35,000-token supply cap since Nov. 6. In its view, that cap means rETH cannot expand further on Core even if demand rises. Rocket Pool added that its Saturn 2 release removes what it called the main barrier for larger holders by introducing a direct redemption path.

Protocol argues rETH positions are lower risk and productive

Rocket Pool said rETH-backed borrowing on Aave Core is generally used for stablecoin loans at moderate leverage rather than for E-Mode looping strategies. That distinction is central to its argument that rETH should not be treated the same way as looped positions considered to be within the ARFC’s scope.

The team further claimed that these positions are more revenue-efficient for Aave because they generate stablecoin interest for Core suppliers instead of relying on users to capture a spread. Rocket Pool said this results in about twice the DAO revenue per dollar of debt, though that remains the protocol’s characterization in its governance post.

Security history and next step

Rocket Pool pointed to its operating history as part of the case for a standalone assessment. The protocol said it has run on Ethereum mainnet since November 2021 without losses to holders. It also said major upgrades are independently audited and that it maintains incident-management procedures, a bug bounty program, and a Security Council able to pause key protocol functions immediately.

The immediate step requested by Rocket Pool is procedural: remove rETH from the current ARFC and review it separately under Aave’s existing Risk Framework. The team said it values its long partnership with Aave and wants rETH to meet whatever standard Aave Core ultimately sets.

Source: governance.aave.com