Crypto Gloss

Pirex ETH

Pirex ETH is the liquid ETH staking product by Redacted Cartel — offering pxETH (a liquid staking receipt for ETH deposited into Pirex-operated validators) and apxETH (an auto-compounding vault that concentrates all validator staking yield among apxETH holders), following the yield-concentration architecture pioneered by Frax Ether, and integrating with Redacted Cartel’s broader Dinero protocol for ETH-backed stablecoin and RPC infrastructure monetization.

Overview

Pirex ETH launched in 2023 as Redacted Cartel’s entry into the Ethereum liquid staking market. Redacted Cartel’s flagship products include Hidden Hand (on-chain bribe marketplace for governance incentives) and Pirex (liquid tokenization of locked positions — originally Pirex CVX for Convex Finance’s veCVX).

Pirex ETH extends the Pirex architecture to ETH staking: rather than tokenizing Convex votes (pxCVX), Pirex ETH tokenizes validator staking positions into pxETH and apxETH, while connecting to the Dinero stablecoin project as the broader ETH infrastructure play.

Two-Token Architecture

Token design and economics are covered in detail below.

pxETH

pxETH is the liquid ETH staking receipt:

  • Mint: deposit ETH → receive pxETH at 1:1
  • NOT rebasing: pxETH balance stays constant; all staking yield goes to apxETH (not pxETH)
  • Zero yield: pxETH earns no staking yield (like frxETH in Frax Ether)
  • Purpose: DeFi-composable ETH representation: usable as collateral, in LP pools, as payment
  • Peg: maintained via Curve pxETH/ETH pool; Redacted bribes vePendleC/CRV for pxETH/ETH gauge to maintain deep peg liquidity
  • Redemption: burn pxETH → ETH; either instant (from buffer) or queued (7-14 days, validators exit)

apxETH

apxETH is the yield-bearing staking vault:

  • Mint: deposit pxETH → receive apxETH (or deposit ETH directly → skip pxETH step)
  • ERC-4626 vault: standard yield vault architecture; apxETH exchange rate vs pxETH increases as rewards accumulate
  • All yield: 100% of Pirex validator staking rewards → apxETH vault → apxETH:pxETH rate increases
  • Yield concentration: since not all pxETH is staked in apxETH → stakers receive 100% of yield even on non-staked pxETH’s validator rewards
    Example: 1000 ETH in Pirex system; 600 ETH staked as apxETH; 400 ETH as pxETH in DeFi liquidity; all 1000 ETH earn validator yield; only 600 ETH worth of apxETH shares → each share gets 1000/600 = 1.67× yield multiplier
  • Auto-compounding: validator rewards auto-reinvested into more validator stake → compound growth in apxETH exchange rate

Redacted Cartel Ecosystem

The ecosystem is made up of the following components.

Redacted (BTRFLY)

Redacted Cartel is the parent organization:

  • BTRFLY: governance token; original BTRFLY → redenominated
  • Revenue from: Hidden Hand bribes, Pirex protocol fees, Dinero operations
  • BTRFLY stakers: receive share of protocol revenues from all Redacted products
  • Treasury: large protocol-owned liquidity in Curve, Convex, and Balancer gauges

Hidden Hand

ApeX ecosystem integration: Hidden Hand is Redacted’s bribe marketplace:

  • Protocols pay USDC (or other tokens) bribes on Hidden Hand → governance token holders (veCRV, veBAL, veANGLE, etc.) vote for bribed projects’ gauges → protocols get liquidity emissions
  • Pirex ETH benefit: Redacted uses Hidden Hand bribes to direct veCRV emissions to pxETH/ETH Curve pool → maintains pxETH peg and deep liquidity → BTRFLY holders earn bribe revenue

Pirex CVX (Original Pirex Product)

Pirex CVX was the first Pirex product:

  • Wraps Convex Finance’s CVX (liquid staking of Convex’s veCVX governance power)
  • pxCVX: liquid vote-locked CVX; holder receives delegated veCVX voting power
  • Vote abstraction: Pirex abstracts veCVX lock into liquid token; users sell pxCVX if they want to exit Convex governance
  • Revenue: bribe revenue from veCVX voting directed via Hidden Hand → shared with pxCVX holders
  • Pirex ETH follows same model but for ETH staking instead of Convex governance

Dinero Protocol

Dinero is Redacted’s ETH-backed stablecoin and infrastructure project:

  • DINERO: stablecoin backed by pxETH/apxETH collateral
  • ETH RPC infrastructure: Dinero operates validator/Ethereum RPC node infrastructure → monetizes RPC/MEV revenue
  • apxETH + Dinero connection: ETH deposited via Pirex → validators run by Dinero node infrastructure → MEV rewards maximized via professional MEV-boost → yield to apxETH holders
  • Future integrations: DINERO stablecoin borrowable against apxETH collateral (Fraxlend-style)

Validator Operations

Pirex ETH manages its own Ethereum validators:

  • ETH deposits aggregated into 32 ETH batches → validator activated on Ethereum Beacon Chain
  • MEV-boost: 100% MEV-boost adoption for maximum block reward capture
  • Node operations: Dinero’s validator infrastructure (professional setup; client diversity)
  • Slashing risk: if Pirex validators slashed → pxETH supply impacted (socialized loss across all pxETH holders)

Withdrawal Architecture

Two withdrawal methods:

  1. Instant: if ETH buffer (unbatched deposits awaiting 32 ETH threshold) available → immediate pxETH → ETH
  2. Standard queue: 7-14 days (Ethereum validator exit queue + processing time)
  3. Curve pool arbitrage: pxETH holders can swap pxETH → ETH on Curve at current market price (immediate but pays curve slippage)

DeFi Integration

The integration works as follows.

pxETH/ETH Curve Pool

Primary peg maintenance and liquidity venue:

  • Curve StableSwap pool (pxETH + ETH)
  • Redacted directs CRV/CVX bribes via Hidden Hand to maintain deep pool
  • Arbitrageurs maintain peg: if pxETH < 1 ETH → buy pxETH → stake as apxETH → earn premium apxETH yield

Pendle Integration

apxETH tokenized on Pendle:

  • apxETH-PT: fixed-rate apxETH yield to maturity
  • apxETH-YT: leveraged staking yield exposure
  • YT-apxETH = leveraged apxETH yield amplified by yield concentration multiplier

Collateral

apxETH accepted as collateral in select lending protocols:

  • Borrowing USDC/DINERO against apxETH position
  • LTV: conservative (75-80%) given non-stablecoin collateral

Sources

  1. Pirex ETH Documentation — Redacted Cartel Team, 2023. Core protocol documentation covering pxETH/apxETH architecture (pxETH contract: ERC-20; mint: user calls deposit(ETH) → pxETH minted 1:1; burn: user calls redeem(pxETH, receiver) → instant if buffer available, else queue; apxETH contract: ERC-4626; deposit(pxETH/ETH) → shares at current convertToShares(assets) rate; withdraw or redeem triggers pxETH redemption from apxETH vault then pxETH→ETH redemption; totalAssets(): pxETH held in vault + pending validator rewards estimate; yield distribution: RewardDistributor contract receives daily_rewards in pxETH equivalent → calls distributeRewards(amount) on apxETH vault → totalAssets() increases → exchange rate increases for all existing apxETH holders; validator batch activation: ETH buffer → when 32 ETH accumulated → PirexEth.initiateValidatorWithdrawal() or activateValidator() depending on version → Beacon Chain deposit contract → validator starts after activation queue); redemption buffer management (target buffer: 10% of total ETH (quick liquidity); buffer auto-refilled when validators earn rewards; large redemption > buffer: ValidatorExitQueue → validators exit in FIFO order → ETH returned to queue holder → 7-27 days (Ethereum exit queue variable)); Dinero integration (Dinero nodes run Pirex validators; MEV captured via mev-boost; MEV: 40% of MEV rewards → apxETH (share of ETH yield); 60% → Dinero treasury; RPC product: Dinero sells Ethereum RPC access to developers/walllets; RPC revenue split → BTRFLY stakers + apxETH yield to come)..]
  1. “Redacted Cartel’s DeFi Stack: Hidden Hand, Pirex, and Dinero” — Redacted Cartel Research, 2023. Analysis of Redacted Cartel’s multi-product DeFi ecosystem — how Hidden Hand, Pirex CVX, Pirex ETH, and Dinero create a vertically integrated ETH infrastructure play: Hidden Hand earns bribe revenue, Pirex ETH controls validator operations, Dinero monetizes ETH infrastructure and stablecoin, BTRFLY aggregates all revenues.
  1. “pxETH vs frxETH: Yield Concentration LST Designs Compared” — Liquid Staking Architecture Research, 2023. Comparative analysis of Frax Ether (frxETH/sfrxETH) and Pirex ETH (pxETH/apxETH) — two LST systems using the same yield-concentration architecture — examining yield differences, ecosystem integration, brand recognition, TVL trajectory, and which is better for specific use cases.
  1. “Pirex CVX: Tokenizing Locked Convex Votes for Liquid Governance” — Convex/Governance Research, 2022. Historical analysis of the original Pirex product (Pirex CVX) — how it solved the illiquidity problem of Convex’s veCVX (16 week lock, no early exit) by wrapping locked CVX into the liquid pxCVX token, enabling holders to sell governance exposure while the Pirex system maintains actual veCVX lock and directs bribe revenue to pxCVX holders.
  1. “Dinero Protocol: ETH Staking Meets RPC Infrastructure Monetization” — Redacted/Dinero Research, 2024. Analysis of Dinero — the Redacted Cartel project combining Ethereum validator operations with RPC service monetization — the thesis that validator operators can monetize both consensus rewards AND sell Ethereum RPC access (which institutions pay millions for), creating a dual revenue stream on the same ETH capital that flows through Pirex ETH’s apxETH.

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