ETH+ has shown a track record of dependability over the past year in production. There have been a modest number of changes made to the RToken, including the recent alteration to its collateral basket composition and contracts upgrades in October 2023 and June 2024. However, it remains one of the most conservative RTokens in terms of basket composition, RToken parameter config, and governance model. From the perspective of ETH index tokens generally, ETH+ strives for a balance between reliability and adaptability that includes adequate checks and timelocks to ensure its properties cannot radically change without notice.

We highlight two categories in which ETH+ could improve: market maturity and distribution of RSR governance.

• Market Maturity: Reserve has adopted a liquidity strategy that involves governance power in Curve and protocol owned liquidity, which has reinforced a stable trend of reliably available liquidity. The reliance on a single venue has been addressed with recent diversification to Uniswap and across multiple DEX pools. ETH+ has been in a robust growth trend for several months in terms of TVL and network adoption metrics, but its liquidity depth has not matched this growth. These are not unusual circumstances for emerging assets and ETH+ shows a generally positive trajectory, but nevertheless, continuous monitoring of the ETH+ market is necessary to ensure the continuation of healthy growth trends.

• RSR Governance: There is an inherent tradeoff for RTokens to prioritize either growth or robust overcollateralization/diverse stakeholder interest. This is managed through the proportional distribution of revenue to RToken holders versus RSR stakers. ETH+ prioritizes attractive yields to ETH+ holders, and therefore retains a minor (2%) overcollateralization buffer from RSR. This increases the risk of governance takeover, although there does exist a Guardian multisig with veto power and roles to pause protocol functions in an emergency situation. Stakeholders may opt to adjust the revenue distribution in the future to attract additional RSR stakers, although this may diminish ETH+'s competitiveness in the LSD and LSD index market. Regardless of buffer size, note that the existence of any buffer presents a unique value proposition that may not be offered by competing products.

Overall, ETH+ showcases a design and management philosophy prioritizing stability. There has been a recent trend toward introducing additional, more aggressive collateral types, although such updates tend to involve a gradual, measured approach. Nevertheless, such trends should be monitored to ensure the risk profile of ETH+ remains acceptably conservative. ETH+ governance is reasonably decentralized, although its protective capacity does rely on privileged addresses entrusted to veto malicious proposals and pause protocol operation in emergencies. Such centralization vectors are relatively minor and limited in scope, especially within the context of the well-designed Governor Alexios governance framework. ETH+ has a well-deserved place as the highest ranked RToken by TVL that presents a strong risk profile commensurate with its recent growth trend.