MIR-51┃Add ETHx as paUSD collateral on Ethereum


This proposal aims to add ETHx as new collateral for paUSD on Parallel on Ethereum.


ETHx is a liquid staking token that users receive when they stake their ETH through Stader. It represents the value of their staked ETH plus accrued staking rewards. Risk Rating. Best. Enables users to earn staking rewards while retaining liquidity of staked ETH to be deployed across DeFi for additional yield.

Stader is a multi-chain liquid staking protocol, currently live on six chains including Polygon, Fantom, BNB, NEAR, Hedera and Terra 2.0. As of June, $608M ($557M from Ethereum) has been deposited into Stader.

You can learn more about these mechanisms in their documentation / Lite paper .

If the vote is accepted by the DAO, the associated liquidation ratio, minimal collateral ratio, debt ceiling, liquidation bonus would be determined on a second MIR discussion.

Project Presentation:
Protocol name: Stader
Token requested: ETHx
Token contract address: 0xA35b1B31Ce002FBF2058D22F30f95D405200A15b
Audit(s) links: Audit Reports | StaderLabs docs
Chain requested: Ethereum
Relation with the project: None.
Website: https://www.staderlabs.com/
Github: Reddit - Dive into anything
Twitter: x.com
Telegram: Telegram: Contact @staderlabs

Token metrics & Risk assessment:

  • Smart Contract risk: C+

The system has multiple audits by SigmaPrime, Halborn, and Code4rena.The minimum proposal delay of 7 days for upgradability in the timelock contract gives an acceptable time to verify the proposed changes.

ETHx has generated more than 91k transactions on Ethereum.


The following is a non-exhaustive overview of the main smart contracts involved with ETHx.


The so-called ETHx repricing token is an OZ Transparent Proxy contract with upgradeability by the general timelock. ETHx also has an L2 contract with an extra PAUSER_ROLE role and without the staderConfig address present in the L1 contract. Currently, this contract is deployed at Arbitrum and Optimism. The mint() and burnFrom() functions are controlled by the StakePoolManager and UserWithdrawalManager contracts, respectively.

Stader Stake Pool Manager

This contract allows users to deposit ETH and is the only minter of ETHx. It is an OZ Transparent Proxy contract with upgradeability by the general timelock. Users can stake ETH for ETHx by calling the deposit() function, and the exchange rate is obtained from the Oracle contract.

User Withdrawal Manager

This contract enables users to withdraw and redeem ETH and is the only burner of ETHx. It is an OZ Transparent Proxy contract with upgradeability by the general timelock. The redemption process consists of three steps: request by calling requestWithdraw(), finalize by calling finalizeUserWithdrawalRequest(), and claim by calling the claim() function. In the request step, the staker transfers ETHx, and the amount of ETH to be claimed is calculated based on the current exchange rate.

ETHx Oracle

The ETHx Oracle receives exchange rate data from node operators through a consensus mechanism. It is an OZ Transparent Proxy contract with upgradeability by the general timelock. Node operators submit exchange rates by calling the submitExchangeRateData() function, using the formula total ETH staked / total ETHx supply.

When the required number of submissions is reached, the exchange rate is updated. Submissions must occur every 7200 blocks (about 24 hours). If the new exchange rate deviates by more than 1%, an Inspection mode is triggered, requiring verification from the Stader manager. This mode can be disabled after 7200 blocks.

An alternative method to update the exchange rate via Chainlink Proof of Reserve feeds is currently deactivated but can be enabled by the Stader manager. Oracle operators provide security collateral to ensure their performance. The list of Oracle operators is available here.

  • Counterparty risk: B

A proposal to reduce the oracle committee from seven to five members passed on January 19, 2024. This change aimed to improve efficiency, and the new committee includes three permissioned node operators, one ETH community member, and one Stader team member. Since then, efficiency has reportedly improved. Initially, 75% of SD tokens were in five multisig wallets, mostly controlled by Stader, but this has decreased to 69% as of April 21, 2024. Snapshot activity has declined, with only two proposals in the last three months and participation down to 1.1 million and 1.5 million SD votes from an average of 1.6 million. There are currently 22k ETHx holders on Ethereum.

  • Market Risk: C-

When analyzing the market cap and trading volumes of assets for listing, we look at data from the past 180 days. Over this timeframe, ETHx’s average market cap is $294M, and its average daily trading volume is $1.45M.

Furthermore the price is pegged to ETH and the ETHx is redeemable for ETH. For this reason we consider the risks of ETHx mitigated by ETH. The price difference between ETHx and ETH shows that ETHx trades at a slight discount to ETH, with peg accuracy ranging from 97.3% to 100.15% over 90 days.

  • Chain Risk : A

Ethereum had 0 outages over the last 6 months. (Ethereum Block Count and Rewards Chart | Etherscan)

  • Liquidity Risk of paUSD on Ethereum: C

This provides the following price impact on the following trade sizes:

1000 USDC → paUSD: 0%
10000 USDC → paUSD: 0%
25000 USDC → paUSD: 0%
50000 USDC → paUSD: 99.87%

  • Overall Risk : B

The Overall Risk is the average of the points mentioned above.


The ETHx/USD Oracle created by Murphy Labs is a wrapped version of the Aave ETHx/USD price feed created to be compatible with the Parallel Protocol.


  • Human resources: Multisig DAO signers will need to sign and execute transactions to add ETHx as paUSD collateral on Ethereum.
  • Treasury resources: There is no cost for the treasury to add ETHx on Ethereum.

Technical implementation:

Set the ETHx/USD oracle into the paUSD PriceFeed contract by calling ‘SetAssetOracle’ function with these parameters:

Voting options:

  • Add ETHx as paUSD collateral on Ethereum
  • Against / Rework the Proposal
  • Abstain

Authors: @starny & @JeanBrasse from Mimo Labs

Community poll:

  • Add ETHx as paUSD collateral on Ethereum
  • Against / Rework the Proposal
  • Abstain
0 voters
1 Like

The proposal is now live on Snapshot: Snapshot

1 Like

The proposal has been approved by the DAO, result: Snapshot

1 Like