pETH Protocol
Liquidity Architecture · Base
Executive Summary

Protocol-Grade ETH Collateral.
Deterministic. Redeemable. Composable.

pETH is an Invariant-First ETH Reserve Token engineered for lending markets. Not validator-backed. Backed by native ETH reserves and protected by a deterministic accounting invariant enforced on-chain.

Reserve Invariant
enforced on-chain
Reserve Accounting
T + F = R
Physical Reserve
ETH Balance ≥ R
T
Outstanding redeemable pETH
F
Accumulated protocol fees
R
Accounted ETH reserve
Redemption Price = (R − F) / T
01

Two-Layer Architecture

Accounting Layer
Native ETH Reserve
T + F = R
Guarantees solvency. Independent of market price.
Mint / Burn
WETH / pETH
ETH-Native Market
Aerodrome · Stable AMM
  • ETH-native price discovery
  • Arbitrage around redemption
  • Liquidation pathway
  • Aggregator & MM friendly
pETH / USDC
USD-Facing Market
Direct dollar gateway
  • Direct USD entry / exit
  • Clear USD price discovery
  • Fiat off-ramp friendly
  • Stablecoin interoperability

The accounting layer guarantees solvency. The liquidity layer provides market access. Neither replaces the other — together they form complementary infrastructure.

02

Two Markets, Two Purposes

Most DeFi assets choose between protocol composability and retail accessibility. pETH is designed for both.

ETH-native market
USD-facing market
Supports arbitrage
Supports accessibility
Optimizes liquidations
Optimizes user experience
Protocol integrations
Retail integrations
ETH parity
Dollar pricing
Core DeFi liquidity
Stablecoin liquidity
03

Why Two Markets?

Users
Holds USDC
Buy pETH
Use as collateral
Borrow USDC / ETH
Redeem whenever desired

USD-facing market makes pETH accessible.

Protocols
Mint pETH
Route through WETH / pETH
Price discovery
Liquidations
ETH ecosystem composability

ETH-native market makes pETH composable.

04

Automatic Market Incentives

Below redemption value
Buy pETH
→
Redeem
→
Receive ETH
→
Wrap to WETH
→
Sell

Price drifts back toward redemption.

Above redemption value
Deposit ETH
→
Mint pETH
→
Sell on market

Supply compresses the premium.

05

Typical Characteristics

Yield-Bearing LSTs
  • Validator-backed
  • Staking economics
  • Slashing exposure
  • Rebase / yield mechanics
  • Validator operations
  • Staking infrastructure
pETH
Designed
  • Native ETH-backed
  • Reserve accounting
  • No slashing mechanism
  • No rebasing
  • Deterministic redemption
  • Accounting invariant
06

Why Integrate pETH?

Lending Markets
  • Deterministic redemption
  • Transparent reserve accounting
  • Simple liquidation path
  • Native ETH backing
  • Protocol-grade accounting
DEXs
  • Efficient arbitrage
  • Stable-pair liquidity
  • ETH-native routing
  • Aggregator friendly
Wallets
  • Direct USD access
  • Intuitive redemption
  • Predictable pricing
  • No yield accounting
07

Built Into The Contract

  • Reentrancy protection
  • EIP-2612 Permit
  • Fee caps
  • Treasury rotation
  • Continuous invariant verification
  • Reserve accounting
  • Surplus accounting
  • Native ETH custody
  • No oracle dependency for redemption
  • No validator dependency

Reviewers don't buy ideas. They buy implementations.

Final Takeaway

Invariant-First. Market-Driven. Protocol-Ready.

Designed to become a foundational ETH collateral primitive for the Base ecosystem.

  • Native ETH reserves
  • Deterministic accounting
  • Continuous solvency enforcement
  • Transparent redemption
  • WETH/pETH — ETH-native liquidity
  • pETH/USDC — USD accessibility