In this article, we will discuss the airdrop distribution, USH token distribution, and the roadmap for unshETH post-Shanghai. unshETH will launch a router for staked ETH liquidity, maximizing yield for deposited LSDs and preferentially depositing new ETH waiting to be staked. In order to achieve this, we propose a new standard, EIP-1435 that will allow approved LSDs to quote fixed yields for specific durations, with a "limit of coverage" that is based on the amount of USH they have staked.

Airdrop Recipient Breakdown

The total supply of 143.5 million USH was created at genesis. Approximately 7.5% of the initial supply was distributed to the community. The airdrop distribution of USH was designed to target users who are typically early adopters of LSDfi projects. This was accomplished by dividing the airdrop into three groups, with each group being defined by their level of participation and engagement in various protocols and staking pools. The aim was to reward early users who demonstrated their support for these protocols and helped build a strong foundation for the USH ecosystem.

1. Group 1: The top users of crETH2, ankrETH, and vETH2 who farmed CREAM, ANKR, and vETH2 within the first 30 days of the launch of each protocol's LSD.

2. Group 2: The largest current users of frax's sfrxETH and users with either Coinbase cbETH, LIdo stETH, or Lido wstETH deposited in Euler.

3. Group 3: Users who provided liquidity in the first 30 days of launch for the Convex ETH+frxETH pool, Aura rETH-ETH Balancer LP, and Aura wstETH-ETH Balancer LP, in proportion to each user's share of cumulative liquidity provided over time.

The core team would like to especially thank the Frax community, as their open-source contributions made up the foundation of our v1 contracts, and their explosive growth has been a beacon of hope for validator decentralization.

In addition to the community airdrop, USH tokens were also distributed to the founders and early contributors of the project. The distribution is as follows:

Providing significant, native token compensation from the start for team members and contributors was done to enable incentive alignment and fast decision making with a pre-defined budget for contributors.

USH Token Distribution

The overall distribution of USH will mirror that of the initial airdrop. 80% of tokens will be unlocked linearly over 12 months by all beneficiaries, net of the amount allocated to pre-Shanghai incentives (~29.6%) for the community allocation. The remaining 20% will unlock linearly over the next 12 months.

Post-Shanghai Roadmap: Bonding, Routing and EIP-1435

After Shanghai, the unshETH team will introduce a router for staked ETH liquidity. This will be achieved by depositing ETH into the validators that offer the best yield for a given “auction” period. Both withdrawn staking yield and newly deposited ETH will be deposited into LSDs according to this rule.

In order to enable authorized LSDs to quote fixed yields for specific durations, with a "limit of coverage" that is based on the amount of USH they have staked, we propose ERC-1435, a standard for Tokenized Vaults with Fixed-Yields backed by a "bonded" stake ensuring payment of a quoted fixed yield.

This will allow for greater transparency and accountability in the system, as LSD operators will have to stake USH in order to attest their reported fees are true. If they misreport, their staked USH will be slashed.

Plug-and-Play Access

The authorization process for any LSD is simple and permissionless. By staking the requisite amount of USH (the “bond”), any LSD operator can quote a fixed yield on some maximum amount of staked ETH (based on the size of the bond). This means that any LSD, old or new, can tap into unshETH’s liquidity, as long as they can compete on yields. If an LSD overpromises and underdelivers, it won’t be long before their stake is completely slashed. Likewise, retail users are protected from misreporting by the operators’ bonded USH.

The requisite USH bond amount (per staked ETH) increases based on the number of LSDs providing quotes in a single auction slot.

Level Playing Field = Better Yields

By aggregating staked ETH liquidity and running a competitive auction process that any LSD can participate in by creating an ERC-1435 interoperable of their staked ETH and bonding USH, unshETH enables seamless inter-LSD competition in a way that brings the best yields to users.

What’s Next

• Look out for the release of EIP-1435 Draft and Reference Implementation

• Our first official AMA, hosted via Twitter Spaces, will be announced on Friday

• Join our Discord to be the first to get the latest updates

And of course, don’t forget to unshETH your ETH at unshETH.xyz!