Overview
This proposal seeks DAO approval to introduce a new redemption feature that allows tETH holders who own a Treehouse Squirrel Council NFT to tender it to the Treehouse treasury in exchange for a one-time Normal Track redemption without the existing 50 wstETH minimum threshold.
All other Normal Track redemption mechanics, including the prevailing tETH exchange rate and withdrawal period, will remain unchanged. Each Treehouse Squirrel Council NFT may only be tendered once and will be permanently transferred to the Treehouse treasury upon use.
Background
tETH Normal Track Redemption
As established under TIP 7, tETH currently supports three withdrawal pathways: Swap, Fast Track Redemption, and Normal Track Redemption.
Normal Track Redemption allows users to burn tETH directly with Treehouse and receive the underlying asset at the prevailing tETH:wstETH exchange rate, subject to a withdrawal period of approximately 7 days.
Following TIP 7, the minimum Normal Track redemption amount is currently 50 wstETH. This threshold was introduced to ensure responsible liquidity management and protocol sustainability.
Treehouse Squirrel Council NFT
The Treehouse Squirrel Council is a collection of 1,000 NFTs deployed on Ethereum (contract address: 0x5816c699f66592179a227c5c2ff8486243962951). The Treehouse Squirrel Council NFT collection is closely integrated into the Treehouse ecosystem, with holders representing a core part of the Treehouse community.
Motivation
While the 50 wstETH Normal Track minimum supports protocol liquidity management, it limits access to this redemption pathway for mid-sized tETH holders who fall below the threshold.
Introducing a Treehouse Squirrel Council NFT tender mechanism would:
- Expand access to Normal Track redemption for eligible tETH holders below the 50 wstETH minimum
- Reward early community members and Treehouse Squirrel Council NFT holders with meaningful, tangible utility
- Strengthen the utility of the Treehouse Squirrel Council NFT collection within the broader Treehouse ecosystem
- Deepen alignment between Treehouse’s NFT community and its core protocol mechanics
No changes are made to existing redemption tracks or parameters. This proposal introduces an additive feature that expands optionality without affecting existing mechanics.
Specification
If approved, this proposal will:
- Allow a tETH holder to tender an eligible NFT to the Treehouse treasury (0xc5bfcbd72f9846138d6094f4236c0711dc28c670) via a smart contract interaction
- Grant the tendering user eligibility for one Normal Track redemption without the 50 wstETH minimum threshold
- Limit each NFT to a single use, with ownership permanently transferred to the Treehouse treasury upon tendering
- Maintain all other Normal Track redemption mechanics and risk parameters
The DAO retains authority to revise, suspend, or discontinue this mechanism through future governance proposals.
Risk Considerations
This mechanism may increase Normal Track redemption activity among tETH holders whose positions fall below the existing 50 wstETH threshold.
The following mitigations apply:
- All existing Normal Track redemption mechanics and safety parameters remain in place
- The mechanic is limited to holders of the Treehouse Squirrel Council NFTs, with a total supply of 1,000 NFTs currently in circulation
- Dynamic liquidity management across existing redemption tracks remains unchanged
- DAO authority to revise or suspend this mechanic through governance if redemption conditions materially change
Implementation Plan
If approved, the DAO assigns Treehouse Protocol to:
- Develop and deploy a smart contract to accept eligible Treehouse Squirrel Council NFT tenders and register the associated Normal Track redemption eligibility
- Submit the relevant smart contract(s) for security audit before deployment
- Update the tETH redemption interface to support the Treehouse Squirrel Council NFT tender option
- Monitor redemption activity and liquidity conditions following implementation
Next Steps
- Gather community feedback on the Governance Forum
- Escalate the proposal to Snapshot for formal voting
- Implement the Treehouse Squirrel Council NFT tender mechanic upon approval