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Debunking the Buffer Pool Upgrade: How it Works

22 Dec, 20252 min read
cmETHmETHmETH Protocol
Debunking the Buffer Pool Upgrade: How it Works

By now, you've probably heard about our Buffer Pool Upgrade.

At a high level, it enables faster ETH to mETH withdrawals. But how exactly does this impact users, and why does it matter?

Previous Buffer Pool

Previously, ETH allocated for withdrawals sat idle. To ensure users could redeem quickly, the protocol maintained a buffer pool of ETH that was unstaked.

This came with two limitations that needed upgrading, the first that idle capital earned no yield, meaning any ETH sitting in the buffer pool wasn't earning staking rewards, which effectively dragged down overall protocol APY.

The second being the buffer pool was capped at ~15,000 ETH, and increasing it further would have meant sacrificing too much yield, which wasn't sustainable at scale.

This created a tradeoff:

  • More liquidity = worse APY
  • Better APY = tighter withdrawal limits

The Upgrade

The buffer pool upgrade introduces a simple but effective change.

Instead of letting withdrawal liquidity sit idle, we put it to work on Aave.

With this upgrade, we're allocating 20% of our TVL to Aave as ETH supply, resulting in a 2% interest gain as a supplier on Aave, mixed with original ETH staking yield. This blended yield is not only competitive, but also utilizes Aave as a deep, liquid backstop for the buffer pool, allowing the protocol to support larger withdrawals without meaningfully harming yield.

In short, this leaves:

  • More ETH available for withdrawals
  • Faster redemption reliability
  • Minimal impact on long-term APY

How Does This Work?

When you initiate a withdrawal, our smart contracts assess the size of your request. Small withdrawals are fulfilled immediately from the on-hand buffer, and large withdrawals are sourced from the Aave reserve.

This dual-approach allows the protocol to handle both everyday redemptions and large mETH exits efficiently, while still targeting a ~24 hour fulfillment window.

To keep everything running smoothly, the protocol monitors its Aave ETH balance with a pre-defined trigger point. When the balance stays above this threshold, nothing happens and the system simply monitors in the background. When it drops below, a replenishment event is triggered.

Users can track withdrawals live-time on our official Dune Dashboard. Both unallocated ETH and the ETH held in Aave can be used to support users’ fast withdrawals.

The Big Picture

With this upgrade, a portion of ETH now earns Aave lending yield instead of native staking yield, reflecting a modest yield tradeoff to improve reliability and scale. This is a foundational step towards deeper leverage, structured products, and institutional usage.

Overall, our buffer pool upgrade was designed to transform mETH into a more liquid, scalable, and institution-ready asset.

This is what building for the long term looks like.