The discussion primarily focused on the proposal to activate emode for rETH in the Aave Ethereum V3 Pool, a suggestion put forward by MarcZeller from the Aave Chan Initiative¹. rETH, a decentralized Liquid Staking Derivative minted by Rocket Pool operators, is currently the third largest ETH Liquid staking token of the V3 market¹. The proposal aims to categorize rETH under emode category 1 for “ETH correlated” assets¹. This activation would enable leveraged strategies based on rETH as collateral, allowing users to both “long” rETH on secondary markets and enhance staking yield via loop strategies¹.

The proposal has garnered support from several community members, including 0xkeyrock.eth², ChaosLabs³, and Gauntlet⁴. ChaosLabs, following their LSD Methodology Update, has backed the addition of rETH to the eth-correlated E-Mode on Ethereum³. Similarly, Gauntlet has also expressed their endorsement for adding rETH to the ETH correlated E-mode on Aave v3 Ethereum⁴.

However, Dcota raised an interesting point, questioning the feasibility of adding emode to rETH on Arbitrum⁵. This query adds another layer to the discussion, suggesting that the community is actively considering the broader implications and potential applications of the proposal. The overall sentiment appears to be in favor of the proposal, with the community eagerly awaiting further developments.