# \#6 - ETHFI DAO Proposal: Incentives on Centralized Exchanges **URL:** \ **Category:** Protocol & Proposals\ **Created:** [October 22, 2024, 1:28am UTC](https://governance.ether.fi/t/6-ethfi-dao-proposal-incentives-on-centralized-exchanges/2521 "2024-10-22T01:28:44Z")\ **Posts on this page:** 11\ **Page:** 1
**Author:** ![ether.fi](https://yyz1.discourse-cdn.com/flex003/user_avatar/governance.ether.fi/ether.fi/32/341_2.png) [@ether.fi](https://governance.ether.fi/u/ether.fi)\ **Post date:** [October 22, 2024, 1:28am UTC](https://governance.ether.fi/t/6-ethfi-dao-proposal-incentives-on-centralized-exchanges/2521/1 "2024-10-22T01:28:44Z")
#### Proposal Summary [ether.fi](http://ether.fi) proposes an allocation of up to 10 million ETHFI tokens to be used specifically for listing Wrapped eETH (weETH) as collateral on centralized exchanges (CEX) for perpetual trading. This allocation will directly support the growth and adoption of [ether.fi](http://ether.fi)’s wrapped staking product (weETH) by providing incentives to CEX users through various promotional activities such as trading contests, deposit competitions, and giveaways. **Useful Links** > [@Ether.fi TEMP Check: Incentives on Centralized Exchanges](https://governance.ether.fi/t/ether-fi-temp-check-incentives-on-centralized-exchanges/2511): > > Proposal Summary [ether.fi](http://ether.fi) proposes an allocation of up to 10 million ETHFI tokens to be used specifically for listing Wrapped eETH (weETH) as collateral on centralized exchanges (CEX) for perpetual trading. This allocation will directly support the growth and adoption of [ether.fi](http://ether.fi)’s wrapped staking product (weETH) by providing incentives to CEX users through various promotional activities such as trading contests, deposit competitions, and giveaways. Rationale The core objective of this proposal… #### Rationale The core objective of this proposal is to expand the use cases of weETH while driving user adoption on CEX platforms. By securing weETH listings and incentivizing user participation, [ether.fi](http://ether.fi) aims to provide multiple benefits, including: - Increased Adoption of weETH: Listing weETH as collateral for perpetual trading opens up a new use case for [ether.fi](http://ether.fi)’s staking asset, increasing its utility in DeFi and centralized trading environments and attracting new types of traders. - Unlocking New Partnerships: [ether.fi](http://ether.fi) aims to unlock partnerships with centralized exchanges and valuable ecosystem protocols. - User Incentives: The allocated tokens will focus on events such as trading contests, deposit competitions, and giveaways. These efforts will drive user engagement and establish [ether.fi](http://ether.fi)’s presence on CEX platforms. - Improved Market Conditions: The broader exposure to perpetual trading, coupled with these incentives, can further contribute to the liquidity and market conditions for weETH, benefiting the [ether.fi](http://ether.fi) community and token holders. - Growth in Basis Trade Opportunities: Listing weETH as collateral on CEX allows for arbitrage and basis trading opportunities, which can further contribute to the liquidity and utility of the wrapped token. #### Supporting Data There is significant potential to capture a portion of the existing market for ETH and staked ETH assets on centralized exchanges. By bringing weETH to these platforms, [ether.fi](http://ether.fi) can tap into a broader audience. ![](https://canada1.discourse-cdn.com/flex003/uploads/etherfii/original/1X/c28b70d34d0be29d94dd1a2893bf44be35420143.png) ![](https://canada1.discourse-cdn.com/flex003/uploads/etherfii/original/1X/a2cd9d07b57b8b82fc9b4a1ffe2699f03f9e519f.png) _Source: Laevitas.ch (18/10/2024)_ The high daily trading volume of ETH perpetual contracts across major exchanges underscores strong demand for leveraged ETH products. By introducing weETH as collateral for perpetual trading, [ether.fi](http://ether.fi) can tap into this growing market. With stETH currently being the only LST/LRT available for perpetual trading (on Weex CEX), there is a significant opportunity for [ether.fi](http://ether.fi) to position weETH as a competitive alternative, driving liquidity and adoption in the LST market. Given that 95% of ETH volume comes from perpetual futures, listing weETH in these markets is crucial for [ether.fi](http://ether.fi) to capture the majority of trading activity, ensuring broader participation and liquidity. ![](https://canada1.discourse-cdn.com/flex003/uploads/etherfii/original/1X/fa4e466f4fce271ecfefe9f521a1771312e2ab99.png "Chart") _Source: CoinMarketCap (15/10/2024)_ Further integrations will also be explored on exchanges, such as native minting of weETH, and paying out restaking rewards (through LRT²) directly to holders. This will further deepen adoption and spot liquidity, while providing an economic advantage to holding weETH over other comparable assets. ` ` **Exchange ETH Futures Open Interest (USD) - YTD** ![](https://canada1.discourse-cdn.com/flex003/uploads/etherfii/original/1X/3dc3b96e7a8c849dcbeb73d5d15cdf73c62b178f.png) _Source: Coinglass_ ![](https://canada1.discourse-cdn.com/flex003/uploads/etherfii/original/1X/8c3c6e3120234d6d4094725c3af5c5d758222b4e.png) _Source: Galaxy Lending_ After a cooldown in ETH open interest and funding rates, there is a prime opportunity to introduce weETH in the next perp cycle, where renewed trading interest could capture premiums and offer attractive rates for users and institutions participating in perpetual markets. ` ` **Ecosystem Partners** These CEX integrations will further allow [ether.fi](http://ether.fi) to enter partnerships with the biggest potential. For example, we can use Ethena’s collateral utilization as a comparative for where LSTs are being used productively, specifically for the basis trade. ![](https://canada1.discourse-cdn.com/flex003/uploads/etherfii/original/1X/267cfbca9b565cab220aee76450f6a9be7ba4294.png) Using the data above from [Ethena’s dashboard](https://app.ethena.fi/dashboards/positions), of the $296M of collateral in LTSs, 59% is on Binance and 35% is on ByBit. Additionally, stETH, a relevant comparable asset for this initiative, does significant volume on ByBit, OKX, Derebit and Bitget. ` ` **Implementation Plan** 1. Allocation of 10M ETHFI: Allocate up to 10M ETHFI to be used exclusively for CEX incentives. 2. Exchange Listings: Work with the Top 10 CEX platforms to get weETH listed as collateral for perpetual trading using a stablecoin pair. 3. Incentive Distribution: Design and implement promotional activities (e.g., contests, and deposit incentives) to distribute ETHFI rewards. 4. Roadmap for Deployment: Establish a timeline for weETH listings on targeted CEX platforms, alongside any required infrastructure developments. The targeted timeline for distribution of tokens is 12 months. 5. Marketing and Partnerships: Build strategic partnerships with CEX platforms and market weETH’s benefits to their user bases. 6. Monitoring and Adjustments: Regularly review and assess the impact of the incentives, adjusting the allocation and promotional strategies as necessary. #### Conclusion This proposal outlines a plan to allocate up to 10 million ETHFI to secure and promote listings of weETH on centralized exchanges. By utilizing ETHFI for user incentives, [ether.fi](http://ether.fi) aims to drive significant adoption of weETH while unlocking new opportunities for growth and partnerships. The proposed initiative aligns with [ether.fi](http://ether.fi)’s broader mission of expanding the utility of its staking token and foster long-term user engagement. #### Next steps Voting duration: The voting window will be open for 4 days Voting to be done through snapshot: [https://snapshot.org/#/etherfi-dao.eth/proposal/0x6f531b65e36f80ca1d9a88b56733488a6b6f59d7cf903720d39fd0a8aabd1e47](https://snapshot.org/#/etherfi-dao.eth/proposal/0x6f531b65e36f80ca1d9a88b56733488a6b6f59d7cf903720d39fd0a8aabd1e47) - For: Approve Incentives for weETH as collateral on Centralized Exchanges - Against: Do not approve the proposal Thank you for your continued support. ---
**Author:** ![Sarthak](https://avatars.discourse-cdn.com/v4/letter/s/eada6e/32.png) [@Sarthak](https://governance.ether.fi/u/Sarthak)\ **Post date:** [October 22, 2024, 3:48am UTC](https://governance.ether.fi/t/6-ethfi-dao-proposal-incentives-on-centralized-exchanges/2521/2 "2024-10-22T03:48:02Z")
This looks awesome. This will help shaping future of etherfi as a project. Kudos to the team. Hope the proposal passes soon. ---
**Author:** ![evgenios](https://avatars.discourse-cdn.com/v4/letter/e/e8c25b/32.png) [@evgenios](https://governance.ether.fi/u/evgenios)\ **Post date:** [October 22, 2024, 12:45pm UTC](https://governance.ether.fi/t/6-ethfi-dao-proposal-incentives-on-centralized-exchanges/2521/3 "2024-10-22T12:45:53Z")
This could help the ecosystem to grow and evolve as a mainstreem project ---
**Author:** ![Sergey\_Lopatin](https://yyz1.discourse-cdn.com/flex003/user_avatar/governance.ether.fi/sergey_lopatin/32/80_2.png) [@Sergey\_Lopatin](https://governance.ether.fi/u/Sergey_Lopatin)\ **Post date:** [October 22, 2024, 2:36pm UTC](https://governance.ether.fi/t/6-ethfi-dao-proposal-incentives-on-centralized-exchanges/2521/4 "2024-10-22T14:36:37Z")
I think it’s a big step up for [ether.fi](http://ether.fi) ecosystem development Let’s go! I’m FOR! ---
**Author:** ![Filimonishe](https://avatars.discourse-cdn.com/v4/letter/f/b19c9b/32.png) [@Filimonishe](https://governance.ether.fi/u/Filimonishe)\ **Post date:** [October 22, 2024, 4:05pm UTC](https://governance.ether.fi/t/6-ethfi-dao-proposal-incentives-on-centralized-exchanges/2521/5 "2024-10-22T16:05:56Z")
This is a good news! ---
**Author:** ![Montserrat](https://avatars.discourse-cdn.com/v4/letter/m/b9bd4f/32.png) [@Montserrat](https://governance.ether.fi/u/Montserrat)\ **Post date:** [October 24, 2024, 10:55pm UTC](https://governance.ether.fi/t/6-ethfi-dao-proposal-incentives-on-centralized-exchanges/2521/6 "2024-10-24T22:55:28Z")
Gracias a todo el equipo por reinventarse continuamente, por querer crecer y por permitirnos crecer a todos nosotros ---
**Author:** ![cryptostar2000](https://avatars.discourse-cdn.com/v4/letter/c/ba8739/32.png) [@cryptostar2000](https://governance.ether.fi/u/cryptostar2000)\ **Post date:** [October 24, 2024, 10:55pm UTC](https://governance.ether.fi/t/6-ethfi-dao-proposal-incentives-on-centralized-exchanges/2521/7 "2024-10-24T22:55:47Z")
seems like reasonable approach ---
**Author:** ![Daadkracht](https://avatars.discourse-cdn.com/v4/letter/d/82dd89/32.png) [@Daadkracht](https://governance.ether.fi/u/Daadkracht)\ **Post date:** [October 30, 2024, 1:09am UTC](https://governance.ether.fi/t/6-ethfi-dao-proposal-incentives-on-centralized-exchanges/2521/8 "2024-10-30T01:09:18Z")
looks very reasonable ---
**Author:** ![mikiemikephys](https://avatars.discourse-cdn.com/v4/letter/m/f4b2a3/32.png) [@mikiemikephys](https://governance.ether.fi/u/mikiemikephys)\ **Post date:** [November 6, 2024, 9:46am UTC](https://governance.ether.fi/t/6-ethfi-dao-proposal-incentives-on-centralized-exchanges/2521/9 "2024-11-06T09:46:33Z")
Supportive of this 👍 👍 👍 ---
**Author:** ![EfiWalley2024](https://avatars.discourse-cdn.com/v4/letter/e/e99b99/32.png) [@EfiWalley2024](https://governance.ether.fi/u/EfiWalley2024)\ **Post date:** [November 15, 2024, 2:55am UTC](https://governance.ether.fi/t/6-ethfi-dao-proposal-incentives-on-centralized-exchanges/2521/10 "2024-11-15T02:55:39Z")
I like it. I am in support of this proposal. ---
**Author:** ![Tulkus](https://avatars.discourse-cdn.com/v4/letter/t/b5a626/32.png) [@Tulkus](https://governance.ether.fi/u/Tulkus)\ **Post date:** [November 24, 2024, 5:23pm UTC](https://governance.ether.fi/t/6-ethfi-dao-proposal-incentives-on-centralized-exchanges/2521/11 "2024-11-24T17:23:51Z")
This proposal is well reseasrched and presented. I will vote yes.