mETH Protocol is launching a buffer pool that uses Aave’s ETH market to process ETH redemptions in approximately 24 hours, with the aim of unlocking institutional demand for liquid withdrawal.
Summary
- mETH Protocol adds a buffer pool that routes ETH to Aave, focusing on 24-hour redemption processing instead of Ethereum’s native exit queues of over 5 to 20 days.
- The upgrade uses dual liquidity paths for smaller and institutional size redemptions, with approximately 20% of TVL allocated to Aave to combine staking and lending returns.
- Backed by custodians and validators such as Fireblocks, Anchorage, Kraken Staked, and Mantle, mETH integrates with EigenLayer, Symbiotic, and over 40 DeFi platforms.
mETH Protocol, an Ethereum liquid withdrawal provider, has announced a liquidity upgrade leveraging Aave’s ETH market to enable faster redemption processing, according to a company statement.
mETH protocol faces challenges
The protocolwhich reported a total peak value of $2.19 billion, introduced a Buffer Pool mechanism designed to process ETH (ETH) redemptions within an estimated 24-hour time frame, depending on buffer capacity and network conditions. The upgrade represents a reduction in Ethereum’s standard exit queues of 5 to 20 days for native staking and most liquid staking tokens, the announcement said.
The Buffer Pool works by supplying ETH to Aave’s ETH lending market, allowing withdrawals to be processed with immediate liquidity and without additional fees, while maintaining base ETH yields, the company said. The protocol reported no cutting incidents so far.
Spot ETH exchange-traded funds posted 65% quarterly growth in net inflows, from $6.2 billion to $10.2 billion by 2025, according to the statement. Ethereum’s staking ecosystem has seen withdrawal queues lasting longer than 40 days in recent months, the company noted.
The upgrade includes a dual liquidity path consisting of an Instant Buffer Pool for smaller redemptions and direct access to the Aave ETH Market Reserve for larger institutional transactions. The system operates on a first-in, first-out model, with proceeds processed within 24 hours, as per protocol.
About 20% of protocol TVL will be allocated to Aave in phases, creating a blended return profile that combines staking rewards with Aave supply interest, the company said.
“Institutional capital requires clear exit routes, not opaque withdrawal queues,” says Jonathan Low, Growth Lead at mETH Protocol. “This upgrade transforms the mETH protocol into the most efficient liquidity gateway for ETH, unlocking the next phase of institutional adoption in on-chain financing.”
The buffer pool will be replenished based on predefined thresholds to maintain liquidity levels. During periods of high redemption demand when buffer capacity is fully utilized, withdrawals will return to the default on-chain exit queue, with processing times dependent on network activity, according to the protocol.
mETH Protocol works with custody partners including Fireblocks, Anchorage, Copper and OSL. The protocol allows institutions to mine mETH within custodial environments and transfer positions to exchanges such as Bybit for trading, the statement said.
The protocol is supported by validators including Kraken Staked and is available as trading and margin collateral on exchanges including Bybit and Kraken. mETH forms part of Mantle Treasury’s ETH reserves and serves as a return component for Mantle Index, the company said.
mETH Protocol works with more than 40 decentralized application integrations, including Ethena Labs, Compound and Pendle, and contributes to network recovery including EigenLayer and Symbiotic, according to the announcement.
The protocol was developed by Mantle and is supported by validator and custodian partners including A41, P2P.org, Kraken Staked, OSL and Copper. The protocol is integrated into more than 40 DeFi and exchange platforms and is included in treasury frameworks for decentralized autonomous organizations and corporations, the company said.
