TAREQ_AFIF

Key Takeaways

Treehouse is building the foundation for fixed income products in crypto, similar to bonds and treasury notes in traditional finance.

Users can deposit ETH or liquid staking tokens (LSTs) to receive tETH, which earns optimized yields through arbitrage.

Decentralized Offered Rate (DOR) is Treehouse’s mechanism for setting reliable benchmark interest rates for crypto, starting with Ethereum.

By standardizing rates across DeFi, DOR is designed to reduce market fragmentation while bringing greater transparency and predictability to yield products.

Introduction

DeFi can give users different ways to earn on their crypto holdings, but finding steady, reliable returns isn’t easy. Interest rates for lending the same asset (like ETH) differ between DeFi protocols, and there is no common benchmark to compare your options. 

This lack of consistency makes it hard to manage risk or carry out long-term income strategies. Treehouse aims to address this by creating a fixed income layer for digital assets, starting with Ethereum, to help you earn more stable, predictable returns over time.

What Is Fixed Income? 

Fixed income refers to investments that pay a steady, predictable return over time. For example, lending someone $1,000 and receiving $50 each year in interest for five years. It’s considered a more stable asset class that makes it easier to plan ahead and manage risk.

What Is Treehouse? 

Treehouse is a decentralized protocol designed to bring fixed income products to crypto through two main components:

tAssets: Yield-generating tokens, like tETH, that use smart arbitrage strategies to help align interest rates across decentralized finance (DeFi) and generate steady returns.

Decentralized Offered Rate (DOR): On-chain versions of traditional benchmark interest rates. They are created through a consensus process and serve as the foundation for new fixed-yield products.

tETH

tETH is a token you receive when you deposit ether or liquid staking tokens like stETH into the Treehouse protocol. But it’s more than just a wrapper for your assets. tETH actively searches for the best yield opportunities across the Ethereum ecosystem and uses arbitrage to boost your returns.

For example, if ether staking rewards are higher than borrowing costs on a lending platform, the protocol takes advantage of that difference and passes the extra yield back to you. So rather than manually moving your ether between platforms to chase better returns, tETH does the work for you. 

tETH holders also earn points through Treehouse’s rewards program, which gives additional incentives to early tETH holders and Treehouse users.

What Are Decentralized Offered Rates (DOR)?

DOR (Decentralized Offered Rates) are on-chain benchmark interest rates for digital assets, much like how traditional finance relies on reference rates such as the Secured Overnight Financing Rate (SOFR). In simple terms, DOR helps answer the question: “What’s a fair, reliable average lending rate for ETH?”.

Instead of guessing or relying on one source, DOR is built through a community-driven consensus process, where different participants come together to share rate data and keep things transparent. The stakeholders in the DOR ecosystem include:

Operators: These are the coordinators of the system. Treehouse, for example, acts as the first Operator, responsible for launching and maintaining the benchmark rate feeds.

Panelists: These are specialized entities, like market makers or staking platforms, that supply interest rate data or forecasts using Treehouse’s tools. 

Delegators: Regular users who delegate their tAssets to Panelists. They maintain ownership of their assets while letting trusted participants submit rate data on their behalf, similar to staking delegation.

Referencers: These are platforms like DeFi protocols, exchanges, or lending apps that use DOR as a pricing reference for their products.

Treehouse Ethereum Staking Rate (TESR) Curve

The TESR (Treehouse Ethereum Staking Rate) curve is Treehouse’s first DOR, created to act as a benchmark yield curve for Ethereum-based fixed income products. Much like how traditional finance uses the U.S. Treasury yields as a baseline, the TESR Curve uses Ethereum staking yields as a reference point for pricing returns in DeFi.

Treehouse considers Ethereum staking as the ideal base rate because it’s built into the protocol, helps to secure the network, and delivers steady, predictable returns. Compared to alternatives like bitcoin mining or stablecoin lending, the protocol supports Ethereum staking as a more decentralized and consistent option for defining a crypto-native benchmark rate.

Use cases

Having a reliable, decentralized benchmark like the TESR Curve opens the door to more advanced financial tools in DeFi:

Interest rate swaps (IRS): Agreements that allow you to trade fixed and floating interest payments, which can help manage risk when rates change.

On-chain treasury products: Crypto’s version of government bonds, which offer more stable, lower-risk options for long-term holders.

Yield curves: With clear rates across different timeframes, protocols can better price loans, savings products, and other fixed income instruments.

Using TESR as a reference can improve risk management for borrowers and lenders and help make DeFi products more accessible to institutional and traditional finance participants.

tETH Risks 

Treehouse has pointed out a few important risks to keep in mind when using tETH since it interacts with both staking and lending platforms.

One major risk is the potential collapse of an underlying protocol, whether it’s a liquid staking service or a lending platform. There’s also the risk of a sudden drop in the value of staked assets, known as a depeg, which could trigger liquidations and lead to losses.

Other potential issues are bugs in the smart contracts, inaccurate data from blockchain oracles, and lending pools becoming overcrowded. When that happens, borrowing costs can increase and reduce the returns you earn from tETH.

How Treehouse Helps Protect Users

Treehouse has implemented multiple safeguards, including a contingency plan for significant depegs, a dedicated insurance fund to cover unexpected losses, and a Protocol-Owned Peg Protection (PPP) mechanism that buys up undervalued tETH during volatile markets. These measures work together to enhance user protection while supporting the long-term foundation for fixed income in DeFi.

TREE Token

The TREE token is the native utility token of the Treehouse protocol. The token is used for a variety of purposes, including:

Paying for DOR data: When smart contracts or businesses use Treehouse’s DOR benchmark data, they pay a small query fee in TREE tokens. This helps generate revenue for the protocol and ensures the fair use of its data infrastructure.

Staking by panelists: To maintain the integrity of DOR rates, panelists (the entities who submit rate data) are required to stake TREE tokens or tAssets. This ensures they have skin in the game and are motivated to submit accurate data.

Earning rewards: After each data submission round (or “observation period”), TREE tokens are distributed as rewards to both panelists and delegators based on how accurate the submitted rates were.

Governance: Holding TREE also gives you the power to vote on key protocol decisions like adjusting parameters, upgrading the system, or changing how rewards are distributed. 

Funding innovation: Through the Treehouse decentralized autonomous organization (DAO), TREE tokens are also allocated as grants to support partnerships, developer tools, and new products built on top of the protocol.

Treehouse (TREE) on Binance HODLer Airdrops

On July 28, 2025, Binance announced TREE as the 29th project on the Binance HODLer Airdrops. Users who subscribed their BNB to Simple Earn and/or On-Chain Yields products from July 10 to 13 were eligible to receive TREE airdrops. A total of 12.5 million TREE tokens were allocated to the program, accounting for 1.25% of the total token supply.

TREE was listed with the Seed Tag applied, allowing for trading against the USDT, USDC, BNB, FDUSD, and TRY pairs.

Closing Thoughts

Treehouse is addressing a key challenge in DeFi by creating the foundation for fixed income products in the crypto space. With innovations like tETH, the TESR Curve, and the DOR mechanism, it aims to bring more predictability to yields, make it easier to compare rates, and create more advanced financial products on-chain.

Further Reading

What Are Funding Rates in Crypto Markets?

What Are Decentralized Derivatives and How Do They Work in DeFi?

Four Ways to DYOR on DeFi Yield Farms

Disclaimer: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial, legal or other professional advice, nor is it intended to recommend the purchase of any specific product or service. You should seek your own advice from appropriate professional advisors. Products mentioned in this article may not be available in your region. Where the article is contributed by a third party contributor, please note that those views expressed belong to the third party contributor, and do not necessarily reflect those of Binance Academy. Please read our full disclaimer for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. This material should not be construed as financial, legal or other professional advice. For more information, see our Terms of Use and Risk Warning.