Integrate hgETH on Euler Market

Euler DAO
1

Summary:

This proposal seeks to integrate hgETH into Euler’s Yield Market for ETH and USDC borrows. hgETH is the receipt token from the High Growth ETH vault on Upshift Finance.

By listing hgETH, Euler can expand its DeFi offering, enhance capital efficiency, and provide users access to a highly composable, decentralized, and yield-bearing asset.

hgETH is the receipt token for a tokenized Upshift vault that has exceeded 10%+ APY with a basket of diversified strategies. This would be the highest intrinsic APY of any ETH based collateral asset on Euler.

There is also a Pendle pool deployed for hgETH with $6m LP liquidity (as of 16th June 2025) - here.

About Upshift & hgETH

Upshift is a platform giving users access to the high yield DeFi strategies used by crypto funds. The platform is powered by August, an institutional smart contract wallet which handles $7B in monthly DeFi volume for clients. Through Upshift, retail investors benefit from vaults run by professional strategists using August to maximize returns. Each vault deposit is then tokenized (e.g. hgETH) and composable across DeFi.

The High Growth ETH vault is curated by UltraYield/Edge Capital and Upshift has undergone 3 audits, most recently in January 2025. The platform currently holds over $350m TVL, with the vault holding over $50m in TVL.

The vault accepts Kelp’s popular Liquid Restaking Token, rsETH. hgETH represents a tokenized deposit position in the vault, and is one of the highest-yielding vault tokens on Upshift. The vault currently includes 12 underlying strategies.

The vault curator is Edge UltraYield, the same team behind Edge Capital (a crypto native hedge fund). They are also a curator behind the collateral asset MEDGE which is currently migrating to Euler Frontier.

Risk Parameters

Loan-to-values (LTVs)

  • Suggested LTV for borrowing ETH-denominated assets with hgETH: 0.90
    *Suggested LTV for borrowing stablecoin assets with hgETH: 0.80

Price Oracles

Price feed for hgETH/USD from eOracle is here.

Benefits to Euler

  • TVL Growth
    • rsETH is one of the most popular LRTs, with $1.45B in TVL. The Upshift High Growth ETH vault is the highest returning vault for rsETH across DeFi and improving its composability and returns will attract significant TVL to Euler.
  • Improved Capital Efficiency
    • hgETH holders can generate additional yield on their collateralized assets (rsETH), promoting greater adoption and expanding the utility of the pool. Additionally, adding PT-hgETH at a future date would enable users to loop hgETH, maximizing their yield.
  • Future Upshift & Euler composability
    • Each Upshift vault is tokenized, and Euler users and TVL can benefit from future high-yielding receipt tokens on Upshift.

Liquidation and redemptions

hgETH functions as a permissionless token that can be liquidated seamlessly, ensuring smooth operations and eliminating bad debt risk. This frictionless redemption process makes those tokens particularly attractive for lending protocols.

Currently there’s a 3 day withdrawal timelock on the ERC-4626 contract - after the timelock, anyone can call the processAllClaims function and redeem the withdrawal. We will support instant redemptions for a small fee, with no timelock. There will be a reserve of 5% of TVL available in the vault contract to facilitate those redemptions and the strategist would exit DeFi positions in the event that they need to facilitate larger withdrawals.

How is yield realized

Edge UltraYield sends rsETH to the distributor contract, and accrued yield is realized daily and accretive to the receipt token, hgETH.

Proposed Next Steps:

We invite the Euler DAO and community to provide feedback on this proposal. If there is general support, we would proceed to the next steps of listing hgETH on Euler, in collaboration with the Euler core team and risk partners.

References:

Upshift website: https://app.upshift.finance

Upshift docs: https://docs.upshift.finance

Discord: Discord

2

Thank you for the hgETH proposal. After review, we recommend proposing a request for an Euler Frontier Market:

  • Frontier isolates risk which suits hgETH’s embedded leverage and higher intrinsic yield.
  • The modular design allows correlated trades (ex: borrowing WETH or stablecoins against hgETH) without affecting existing Euler pools.
  • Listing requires a Frontier Market Request in the community thread using the posted template:

Request for Deployment: Frontier [Project]

Project Information

  • Name: [Your project’s name]
  • About: [A brief paragraph about the project]
  • Author: [Your name/pseudonym and your affiliation with the project]
  • Metrics:
    • Launch date: [01 Jun 2025]
    • All-time-high TVL: [$123M]
    • Current TVL: [$123M]
    • Supported chains: [Ethereum, Base]
  • Links:
    • Website: [URL]
    • Docs: [URL]
    • Audits: [URL]
    • Dune: [URL]
    • DefiLlama: [URL]
    • X: [URL]
    • Discord: [URL]
    • [Any others you deem useful]

Market Specification

  • Network: [Ethereum]
  • Category: [The correlation category for the market such as USD, ETH, BTC, AVAX, S]
  • Blue-chip asset: [The single correlated blue-chip asset such as USDC, WETH, WBTC, WAVAX, wS]
  • Primary ecosystem asset: [The main ecosystem asset such as USDe, ezETH, LBTC, ggAVAX. Include its address.]
  • Derivative assets: [Available derivatives of the ecosystem asset, including staked versions of the primary asset, tranches, fixed-yield PTs. Include their addresses and format them as a bullet list.]
    • [sUSDxyz (0x1111111111111111111111111111111111111111)]
  • Incentive commitments: [For token incentives specify action (e.g. supply USDC, borrow USDC, amount, duration. Liquid token incentives are distributed through Merkl. For point incentives specify action, multiplier, and other relevant information specific to the program. Format them as a bullet list.]
    • [$10k USDC over 1 month for lending USDC]
    • [5x points for supplying USDC]

Please let us know if you have questions on Frontier Markets or need additional information.

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