alETH

alETH is a yield-bearing representation of redistributed LST that serves as proof of collateral. The alETH amount represents an individual ownership of a specific Vault, fully redeemable at any given time.

Properties

Property	Description
Backing	1:1 with vault shares
Value	Increases with vault NAV
Delegation	Maintains EigenLayer security
Yield	Compounds automatically
Format	al<Asset>-<Vault>

alETH tokens are scoped to both the underlying asset and the Vault.

For example, alstETH-edge represents a position where stETH was allocated to the Edge vault. alrETH-prime would represent rETH allocated to a vault called Prime.

This means alETH is not a single fungible token across the system. Each asset-vault combination has its own alETH token, its own strategy in EigenLayer, and its own pricing tied to that specific Vault's NAV.

Minting

alETH is minted during allocation. When an Operator calls allocate(), the AVS:

1. Redistributes LST from the Operator's EigenLayer delegation to the Vault

2. Receives Vault shares in return

3. Mints alETH equal to the shares received

4. Submits the alETH to EigenLayer's RewardsCoordinator for restaker claims

IMintableBurnableERC20(slashedToken).mint(address(this), vaultShares);

The minting is atomic with the deposit - no intermediate state where shares exist without corresponding alETH.

Burning

alETH is burned during unallocation through a two-step process:

Step 1: Request Unallocation When a holder calls requestUnallocate(), the AVS:

1. Burns the alETH tokens from the holder

2. Requests redemption from the Vault

3. Tracks the estimated redemption amount as pending

IMintableBurnableERC20(slashedToken).burn(address(this), tokenAmount);

Step 2: Complete Unallocation When a holder calls completeUnallocate(), the AVS:

1. Withdraws redeemable LST from the Vault

2. Deposits the returned LST into the holder's EigenLayer strategy position

Value Accrual

alETH does not rebase. The token quantity stays constant, but its redeemable value increases as the underlying Vault's NAV grows.

A holder who minted 100 alstETH-edge when NAV was 1.0 and redeems when NAV is 1.15 receives 115 stETH worth of value (minus any applicable fees).