In the DeFi fixed income market, the liquidity gap of "staking locks liquidity, urgent cash needs incur high unlocking costs, and idle assets are hard to liquidate quickly" has long plagued users—after staking 1 ETH, if funds are needed temporarily, users either wait several days for the unlocking period or accept a 5%-10% discounted sale loss, making it difficult to achieve both "returns and liquidity". TreehouseFi breaks away from the traditional model of "locking for returns" by using the DOR liquidity sensitivity interest rate center to balance returns and liquidation, the tiered liquidity system of tAssets to match different liquidation needs, and instant liquidity tools to reduce liquidation costs, creating a liquid ecosystem where "staking generates income without locking, urgent cash needs can be quickly liquidated, and idle assets can be flexibly allocated". This breakthrough from "locked idle" to "liquid income" not only alleviates users' liquidity anxiety but also becomes a highly liquidity-friendly fixed income infrastructure in the current crypto market.
I. Filling the liquidity gap: The liquidity logic of DOR and tAssets
The core issue of the "liquidity gap" lies in the "strong binding between returns and liquidity, few liquidation channels, and high costs". TreehouseFi's dual-core design accurately achieves "both liquidity and returns":
• DOR: More than just a fixed interest rate, it is a "balancer" for liquidity adjustment: Unlike other protocols where "the longer the lock-up, the higher the interest rate", DOR links interest rates to liquidation flexibility through "dynamically weighted liquidity risk coefficients"—choosing "immediate liquidation tAssets" results in a base annualized rate of 4.7% (only 0.2% lower than long-term lock-ups); choosing "7-day unlock tAssets" yields 4.9%; choosing "30-day lock-up tAssets" yields 5.1%. As of the end of February 2026, users opting for "immediate liquidation" accounted for 42%, with an average liquidation cost of only 0.3%, far below the industry discount level of 3%-5%, completely escaping the dilemma of "sacrificing returns for liquidity".
• tAssets: More than just staking certificates, they are tiered liquidity "passports": After users deposit ETH/stETH, they can choose the liquidity type of tAssets—"lightning-type tETH" (supports immediate liquidation within 1 minute, connected to Uniswap V4 liquidity pool, slippage ≤ 0.1%), "flexible-type tETH" (T+1 unlock, no fees), "stable-type tETH" (30-day lock-up, additional 0.2% liquidity reward). More importantly, different types of tAssets can be converted without loss, for example, "stable-type tETH" can be unlocked early and converted to "lightning-type" by just making up the 0.2% reward difference, with no additional fees. Currently, the proportion of users converting tAssets liquidity reaches 53%, and the earnings loss rate of temporary liquidation users has dropped from 8% to 0.5%.
II. Professional moat: Hard support from "liquidity design" to "safe liquidation"
TreehouseFi's "liquidity-friendly" approach does not involve "sacrificing safety for flexibility"; rather, it relies on "liquidity pool backing, institutional-level liquidation channels, and risk isolation" to ensure "liquidation without loss of assets":
• Instant support from liquidity pools: The protocol constructs a "cross-chain liquidity reserve pool", integrating the liquidity of tAssets from Ethereum, Arbitrum, and Mantle across three chains, reaching a scale of $280 million, providing instant liquidation support for "lightning-type tETH". When users initiate instant liquidation, the liquidity pool takes priority; if the pool’s funds are insufficient, it automatically triggers the "institutional liquidity borrowing channel" (in cooperation with market makers like Jump Crypto and Wintermute) to ensure a successful liquidation rate. As of February 2026, the pool's maximum single-day instant liquidation scale reached $12 million, maintaining zero latency and a 100% liquidation success rate.
• Compliance and safety for institutional-level liquidation: By the end of February 2026, TreehouseFi reached a partnership with Canadian Imperial Bank of Commerce Asset Management (CIBC Asset Management) to launch "institutional-level liquidity products"—institutional users holding tETH can use the exclusive liquidation channel from CIBC to instantly exchange for fiat or compliant stablecoins (like USDC), with fund clearing in compliance with Canadian OSC regulatory requirements, and the liquidation rate consistent with retail users (no additional premium). The initial fundraising scale exceeded $100 million, with institutional users' instant liquidation accounting for 48%, validating the demand for "large funds can also be flexibly liquidated".
• Liquidation protection through risk isolation: The protocol strictly separates liquidity operations from base earnings—when users instantaneously liquidate tAssets, only their currently held asset shares are utilized, without affecting earnings that have already been generated; during the liquidation process, the underlying ETH/stETH is still held in a multi-signature wallet, preventing "liquidation from causing asset loss". Additionally, a risk reserve fund (currently $29 million) has allocated $8 million specifically as "liquidation risk reserve fund"; if a liquidation loss occurs due to liquidity pool failure, full compensation will be made within 48 hours. Currently, the user complaint rate related to liquidation is below 0.12%, with no cases of asset loss.
III. Trend alignment: Anchoring market increments with "liquidity priority"
Currently, the crypto market is seeing users shift from "long-term lock-up" to "flexible allocation", and TreehouseFi's liquidity design precisely aligns with the core trend of "liquid income":
• Institutional liquidity allocation demand: Traditional asset management institutions need "assets that can be quickly liquidated to respond to redemptions". TreehouseFi's liquidity system meets their needs for "stable returns + high liquidity". Currently, 37 traditional asset management institutions have allocated liquidity-type tAssets through its platform, with a total funding of over $310 million. The asset liquidation response time has been reduced from the industry average of 48 hours to 10 minutes, significantly improving capital utilization efficiency.
• Integration of liquidity and RWA: Unlike similar projects that have "long RWA lock-up periods and poor liquidity", TreehouseFi has launched the "liquid RWA-tAssets package"—users can invest in the US toll road RWA project (annualized 5.4%), converting 50% of their shares into "lightning-type tETH" for immediate liquidity; the remaining 50% is retained as "stable-type" for an additional 0.3% return. The minimum investment is $100, and the first phase attracted over 12,000 retail users, of which 65% stated they chose RWA "because it can be flexibly liquidated", verifying the key role of liquidity in the popularization of RWA.
• Optimization of "simple liquidation" for retail users: For ordinary users, TreehouseFi has launched a "liquidity calculator"—input the "amount to be liquidated and acceptable earnings loss", automatically recommending the optimal options of "lightning-type/flexible-type", and displaying in real-time the "liquidation arrival time, fees, and actual amount received"; at the same time, it has introduced a "one-click liquidation + reinvestment" function, allowing leftover assets to be automatically reinvested after liquidating part of the funds, without manual operation. Currently, the instant liquidation usage rate among retail users reaches 68%, and the reinvestment rate after liquidation reaches 75%, addressing both liquidity needs and not interrupting long-term returns.
The essence of TreehouseFi's innovation is to be a "liquidity activator" for DeFi fixed income—balancing returns and liquidation costs with DOR, matching different liquidity needs with tAssets, and ensuring instant liquidation safety with reserve pools. As institutional liquidity allocation needs rise, retail users' awareness of "flexible financial management" increases, and RWA liquidity scenarios expand, its value as a "liquid fixed income hub" will become more pronounced. For users, whether they are ordinary people wanting "urgent cash without sacrificing returns", or institutions needing "quick liquidation to respond to redemptions", TreehouseFi provides a solution of "earning fixed income without sacrificing liquidity", while the $TREE token, as the rule-maker for ecological liquidity and the core of profit distribution, will continue to release long-term value in the tide of liquidity prioritization.@Treehouse Official
