Crypto Gloss

KelpDAO

KelpDAO is a liquid restaking protocol on Ethereum that issues rsETH — a unified Liquid Restaking Token (LRT) fungible across multiple underlying LSTs — enabling users to deposit wstETH, stETH, cbETH, ETHx, and other LSTs into a single pool that deposits into EigenLayer for restaking yield while maintaining a single liquid token for DeFi composability.

Overview

KelpDAO launched in 2023, built by the Stader Labs team as a separate EigenLayer-focused product. Where most LRTs issue one token per LRT operator (etherfi issues eETH, Renzo issues ezETH, Puffer issues pufETH), KelpDAO’s rsETH is designed as a multi-LST basket token: users can deposit any supported LST and receive rsETH representing a proportional share of the entire pool’s EigenLayer restaking position. This approach sacrifices some yield customization in favor of a deeper, more liquid unified LRT token.

rsETH: Multi-LST Liquid Restaking Token

The following sections cover this in detail.

Deposit Mechanism

  1. User deposits a supported LST (wstETH, cbETH, stETH, ETHx, etc.) to KelpDAO
  2. KelpDAO aggregates all LST deposits and restakes them into EigenLayer operators/AVS
  3. User receives rsETH — fungible across all depositor LST types
  4. rsETH value accrues as EigenLayer restaking rewards distribute

Multi-LST Approach Comparison

Most LRTs gate on a single underlying:

  • etherfi: deposits ETH, issues eETH
  • Renzo: deposits ETH/LSTs, issues ezETH (but primarily Renzo’s own ETH staking)
  • Kyoto/Ion: more specialized

KelpDAO: accepts many established LSTs (wstETH, cbETH, ETHx), creating a basket LRT similar to how index funds work vs individual stock selectors.

rsETH Pricing

rsETH does not target 1:1 with ETH — it accrues value over time as:

  • Underlying LST values increase (ETH staking yield)
  • EigenLayer AVS rewards are distributed to the pool

EigenLayer Integration

KelpDAO delegates RST (pooled LST deposits) to EigenLayer node operators:

  • KelpDAO DAO governance selects which EigenLayer operators to delegate to
  • Operators run AVS (Actively Validated Services) and earn rewards
  • Rewards flow back to rsETH value or distributed to rsETH holders
  • Slashing risk: if operators are slashed, rsETH pool takes a haircut

KELP Token

  • Governance — KELP holders govern node operator selection, LST whitelist, fee rates, treasury
  • Partner token to Stader’s SD token (shared team, separate governance)
  • Airdrop distributed to early KelpDAO rsETH minters and liquidity providers

DeFi Integrations

rsETH is integrated as collateral in:

  • Aave V3 (Ethereum and Arbitrum)
  • Morpho Blue isolated markets
  • Balancer liquidity pools (wrsETH/WETH)
  • Pendle Finance PT/YT markets for rsETH yield tokenization

Sources

  1. KelpDAO Documentation — KelpDAO / Stader Labs Team, 2023–2024. Protocol documentation covering rsETH multi-LST deposit mechanics, EigenLayer operator delegation process, fee structure, KELP governance token distribution, and DeFi integration map for rsETH composability.
  1. “rsETH: A Multi-LST Approach to Liquid Restaking” — KelpDAO Blog / Bankless, 2023. Product overview of rsETH contrasting its multi-LST basket approach vs single-LST LRTs like eETH and ezETH — explaining tradeoffs in yield customization, liquidity depth, and DeFi composability.
  1. “EigenLayer Restaking Ecosystem: Comparing LRT Protocols” — Messari Research / Delphi Digital, 2023–2024. Comparative analysis of major LRT protocols — etherfi, Renzo, KelpDAO, Puffer, StakeWise — by TVL, underlying collateral structure, AVS delegate diversity, fee models, and slashing risk exposure.
  1. “rsETH on Aave V3: Risk Assessment and Collateral Parameters” — Chaos Labs / Aave Risk Committee, 2024. Risk methodology for onboarding rsETH as Aave V3 collateral — LTV setting, liquidation threshold, oracle design for rsETH pricing, and analysis of liquidity depth for forced position liquidation.
  1. “Pendle rsETH Markets: Yield Tokenization for LRT Holders” — Pendle Finance / KelpDAO Blog, 2024. Overview of Pendle Finance’s PT/YT markets for rsETH — how users can tokenize rsETH’s future restaking yield stream into tradeable PT (fixed-rate equivalent) and YT (yield speculation), with analysis of implied restaking yield rates from PT discount data.

Related Terms