Summary
Hinkal proposes the addition of hETH as a supported collateral and debt asset. By integrating hETH, Euler will enhance its collateral diversity and attract new users, leveraging Hinkal’s ETH derivative to boost lending and borrowing activity on the platform. Moreover, we will continue to offer Hinkal Points as an incentive for users who pledge hETH as collateral on Euler.
To enhance investor confidence in Hinkal, immediate withdrawals are enabled for users to instantly swap their hETH for ETH on the Hinkal dApp. hETH is directly pegged to ETH on Hinkal’s smart contract. It is not used for any activity. Owners of hETH have full custody of the underlying ETH.
hETH is already available as a collateral asset on Morpho with Re7 and MEV Capital as liquidity providers, and has actively been used to borrow wETH. hETH is also available on Curve, Balancer, Spectra and other dApps.
Motivation and opportunity
Listing hETH as collateral and debt assets on Euler expands Euler’s collateral options, which will increase Euler utilization and contribute to long-term activity on the platform.
By integrating hETH into the Prime market, Euler will unlock new utility for hETH holders, allowing them to collateralize their assets while continuing to earn leveraged staking rewards.
Benefits of adding Assets to Euler markets
- Increased Activity in the Prime market
Integrating with Euler will encourage stakers to utilize their hETH for leverage, driving higher lending and borrowing volumes within the Pool. - TVL Growth
This partnership will expand hETH’s community and increase TVL on Euler while enhancing its utility. Euler users can take advantage of hETH’s private staking features for added benefits. - Improved Capital Efficiency
hETH holders can generate additional yield on their collateralized assets, promoting greater adoption and expanding the utility of the pool.
Chains to be listed - as continuation of step a., specify which chains will be best to list the asset and why.
At present, the Ethereum mainnet is our focus.
Useful Links
Next Steps - clear and concise description of the next steps if the proposal is approved.
Marketing Push: Launch a targeted awareness push to promote hETH’s integration on Euler, highlighting the ability to borrow against hETH to increase exposure to Hinkal Points.
Basic Risk Analysis
Below, a non-exhaustive list of risks relevant to hETH are outlined, along with the protocol’s risk management strategies.
General analysis
The primary risk associated with hETH is the potential for the smart contract hack. The contract has been audited four times. There is no de-pegging risk as hETH is directly priced against ETH in the smart contract.