Treehouse Protocol
About
Treehouse Protocol is a decentralized fixed income layer that provides enhanced yield opportunities through tAssets (tokenized assets like tETH and tAVAX). The protocol connects yield primitives, benchmark rates, and participation layers into unified fixed income infrastructure, enabling users to earn yield while contributing to rate convergence across fragmented DeFi markets.
Where Does Yield Come From?
Treehouse Protocol generates yield for users through three main layers that build on top of each other.
Layer 1 – Base staking yield. The protocol's tAssets (like tETH and tAVAX) hold underlying Liquid Staking Tokens (LSTs), which earn rewards from proof-of-stake blockchains. This is the foundational return.
Layer 2 – Market Efficiency Yield (MEY). The protocol takes those LSTs and uses them as collateral to borrow ETH on lending platforms. It then converts that borrowed ETH back into more LSTs, effectively amplifying the staking rewards. This is a form of interest-rate arbitrage — profiting from differences between borrowing costs and staking returns. The protocol constantly checks whether the trade is profitable and adjusts borrowing levels accordingly, with built-in safety limits.
Layer 3 – Bonus points. On top of the above, users may earn additional rewards from points campaigns.
Fees and redemption choices. If the Market Efficiency Yield is positive, a 20% performance fee is taken on those gains (collected in the tAsset's base token). When you want to cash out, you have two options:
- Standard redemption queue — wait 7 days (for tETH) or 17 days (for tAVAX).
- Fastlane (instant) — pay a 2–4% fee to skip the queue and redeem right away.
Bigger picture. By automatically running these arbitrage strategies across different lending protocols, Treehouse aims to push fragmented on-chain interest rates closer to a single, fair risk-free benchmark — making the market more efficient for everyone.
Persons
Benedict
Governance Lead
Martin
Team Member
Bryan
Team Member
Audits
| Audit / Date | Findings | Verdict |
|---|---|---|
Fuzzland20-09-2024 - 30-09-2024 |
| The audit found no critical or high-severity vulnerabilities, only low and informational issues that were all reportedly resolved, indicating a relatively secure codebase with proper attention to minor improvements. |
Sigma Prime01-08-2024 |
| Sigma Prime's review found no critical or high-risk vulnerabilities, with medium issues relating to ERC4626 share inflation and Lido fee timing—both addressed or mitigated. The protocol demonstrates robust security posture with low-severity findings largely resolved and informational improvements acknowledged. |
Sigma Prime01-03-2025 |
| The audit uncovered one critical vulnerability that was promptly resolved, with remaining issues being low-severity or informational, indicating generally robust security posture for the tETH updates with no high-risk findings. |
Sigma Prime01-09-2024 |
| The audit revealed only one low-severity issue that was resolved and three informational findings, indicating the protocol updates were relatively secure with no critical or high-risk vulnerabilities identified. |
Trail of Bits27-08-2024 |
| The audit found one high-severity vulnerability (now resolved) and several lower-risk issues, with the system's security heavily dependent on proper management of privileged actor accounts and improvements needed in off-chain component testing and secret handling before production deployment. |
Trail of Bits03-09-2024 - 13-09-2024 |
| The audit revealed two medium-risk vulnerabilities requiring attention, plus several informational issues highlighting design complexity and centralization dependencies. While four findings were resolved, the team accepted residual centralization risks for two medium/informational issues. |
WatchPug23-04-2025 |
| The audit identified one medium-risk issue and three informational findings, all of which were fixed prior to report finalization. No critical or high severity vulnerabilities were found in the Merkl Claim functionality. |
WatchPug20-03-2025 |
| The audit revealed only informational findings related to precision loss and timing considerations in the airdrop mechanism, with all issues addressed by the team before deployment. |
WatchPug22-08-2025 |
| The audit revealed no critical or high-risk vulnerabilities, with moderate issues primarily around reward claiming and oracle data validation, most of which were reportedly fixed before deployment. |
WatchPug04-11-2025 |
| The audit found one medium-severity vulnerability that could allow asset drainage through malicious pool parameters, which was reportedly fixed with a whitelist solution. Overall security posture appears manageable with this single addressed issue. |
WatchPug02-12-2024 |
| The audit found no critical or high-severity vulnerabilities, with identified medium and low issues being addressed, indicating reasonable security posture for the Treehouse tETH protocol at the time of review. |
WatchPug28-12-2024 |
| The audit identified one medium-severity economic risk in redemption logic and two informational issues, all acknowledged by the Treehouse team, with the most significant finding concerning potential double exposure to wstETH price declines during redemption waiting periods. |
WatchPug25-02-2025 |
| WatchPug's audit found several logic and precision bugs that were all fixed before deployment, resulting in no critical or high severity vulnerabilities in the reviewed codebase. |
WatchPug25-02-2025 |
| The audit found no critical or high-severity vulnerabilities, with only medium and low issues affecting NAV calculations and withdrawal return values, indicating generally sound implementation with some integration edge cases to address. |
WatchPug23-05-2025 |
| The audit revealed no critical or high-risk vulnerabilities, with all identified issues being of medium or lower severity and mostly addressed. The timelock rescue mechanism appears to have been reviewed for edge cases and naming clarity across different blockchain environments. |
Backers
Treehouse Labs (parent company) has raised two funding rounds:
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$18 million seed round with investors including Binance Labs, Lightspeed Venture Partners, Mirana Ventures, Jump Capital, GSR, Wintermute, Global Founders Capital, and senior executives from SoftBank Vision Fund.
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Strategic funding round in April 2025 at a $400 million valuation, led by the venture arm of a major life insurance and financial services firm managing over $500 billion in assets. The round also included prominent angel investors: Jordi Alexander (Selini), Guy Young (Ethena), Darius Sit (QCP), Rich Teo (Paxos), Matthew Tan (Etherscan), Michael Ashby (Algoquant, former Head of Digital Assets at Point72), Mirko Schmiedl (Staking Rewards), Jack Yang (LTP), Benedict Chan (former CTO of BitGo, Head of Engineering at Chainlink), and key contributors from Lido and EtherFi.
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Strategic partnership (March 2026): AVAX One, the first publicly traded Avalanche treasury company, deployed over 800,000 AVAX into Treehouse's tAVAX strategy, marking a significant institutional deployment.
Additional backers displayed on the Treehouse website include MassMutual Ventures, Bybit, LeadBlock Partners, Moonvault Capital, K3 Ventures, Coinhako, Bitpanda, Pintu, The Brooker Group, Ventura, Caladan, Pulsar, Fundamental Labs, Berioza, CRC Capital, Portofino, and Lian Group.
Legal
Legal form
Corporation
Registration jurisdiction
Republic of Panama
Status and notes
Website owned and operated by Gaia Labs Corp, a corporation formed under the laws of the Republic of Panama. Terms of Service and Privacy Policy available at docs.treehouse.finance/protocol/legal/. The Treehouse Protocols are copyrighted works belonging to the Company and/or its Affiliates.