reETH: Native Token
Last updated
Last updated
reETH is the native gas token to the chain. reETH is 100% backed by LSTs (liquid staking tokens) in the native bridge, so that all ETH bridged to re.al earns yield on the chain.
reETH is value-accruing, meaning it goes up in value vs ETH as ETH yield accrues to the token, similar to popular LSTs like wstETH or sfrxETH. The example below illustrates how value accrues to the token assuming a staking yield of 3%.
Day 0
3%
1 ETH
Day 365
3%
1.03 ETH
The reETH on re.al functions the same as ETH on Ethereum mainnet or any other Ethereum L2, with the exception that it accrues value from staking. Gas fees, token swaps, asset payments done in ETH on other chains will be completed in reETH on re.al, processed at significantly lower costs to the L1 due to the processing efficiencies of an L2.
Through the deployment of reETH, all ETH on the chain, no matter where it's held, earns staking yield for users. This unlocks new design opportunities and DeFi primitives in the re.al ecosystem while helping users maximize the value of their assets.
At any time, the reETH to ETH conversion rate can be found here.
The vault, strategy manager and minter all sit in front of the bridge when the transaction destination is re.al.
The RealETH Vault is responsible for managing deposit, withdrawal, and settlement processes using the ERC4626 standard. Serving as the fund buffering pool, it holds deposited ETH within the contract until a new settlement occurs, at which point the funds are deployed to the underlying strategy pool.
The Minter handles the minting and burning of reETH tokens. This function decouples reETH token minting from its underlying assets, allowing for independent adjustments to the assets and the circulation of issued reETH tokens. This separation ensures a higher level of token stability within the re.al ecosystem.
The Strategy Pool manages asset yield routes through a whitelist mechanism. This approach ensures a high level of asset compatibility, including staking pools, restaking protocols and more. Each individual strategy route within the pool isolates asset risks, preventing cross-contamination and maintaining the security of reETH assets.
Users initiate a bridge transaction to re.al, to send ETH through the native bridge to the chain.
Prior to the bridge, ETH enters the re.al Vault and waits for the next epoch to be deployed in the strategy as per the portfolio allocation ratio. The ETH remains on the Ethereum L1 where it begins to earn staking yield.
The minter mints the incoming ETH using current share price of the vault to account for the generated yield and sends minted reETH through the bridge to the user's wallet on re.al.
When bridging out, the process is reversed, burning reETH and unstaking ETH from the vault. The user receives the reETH value in ETH on the destination chain.
Initially ETH will be 100% staked using Lido stETH and new strategies will be added as TVL expands, upon approval from the community via governance vote.
Upon bridging back, users have the option to redeem ETH by burning reETH. The vault conducts calculations to determine the precise ETH amount, factoring in the current share price along with accrued yield and principal amounts. Users are provided with two withdrawal choices:
Standard withdrawal: 11 - 17 Days (7-day challenge period + LST redemption window) The standard withdrawal option enables users to convert reETH into ETH by initiating a withdrawal request from the strategy and settling the user using the real Vault ETH buffer.
Swap withdrawal: 7 Days Alternatively, users can choose the swap withdrawal option, which entails swapping strategy tokens on the Decentralized Exchange (DEX) based on the portfolio allocation ratio in the strategy manager. This route may incur additional transaction fees/slippage in the DEX transaction.
In a hurry? Try bridging out through $USTB or $MORE to any of the chains supporting those assets. The bridge UI will route those assets through the LayerZero cross-chain messaging protocol for settlement in under an hour.
Compared to the Ethereum Layer 1, users can expect a significant reduction in gas fees on re.al.
To make this possible, re.al batches transactions together, effectively spreading the cost of a single layer 1 transaction across multiple layer 2 transactions. This can also help to insulate the L2 from spikes to gas requirements on the L1 due to network congestion.
With the addition of modular DA currently provided by the Arbitrum Data Availability Committee (DCA) re.al provides an optimal combination of transaction security, speed (throughput) and cost.
