# Upcoming Release

The next release transitions ETH Strategy from a permissioned system to a permissionless protocol. Three core mechanisms move on-chain and become available to anyone.

## Permissionless Bonding

**Currently:** Bonding is permissioned — ESPN bonds on behalf of its depositors to execute the volatility trade.

**Upcoming:** Anyone can purchase a USD-denominated convertible note directly from the protocol, paying with ETH (priced via an ETH/USD oracle). The buyer receives CDT (fungible debt) + an NFT option (conversion rights). No intermediary, no whitelist.

Each note encodes:

* **Conversion entitlements** — how much STRAT and esETH the holder can claim
* **Settlement entitlement** — the USD notional value redeemable after expiry
* **Timelock** — \~6.9 days before conversion becomes available
* **Expiry** — \~4.2 years

Conversion entitlement pricing uses PCF (Premium Control Factor) and GCF (GAV Control Factor) — two governance-tunable parameters that scale entitlements based on the protocol's gross asset value and the current premium.

For the full mechanics, see [Convertible Notes](https://docs.ethstrat.xyz/core-mechanics/convertible-notes).

## On-Chain STRAT Staking

**Currently:** STRAT staking rewards are distributed via merkle claims.

**Upcoming:** The StakedStrat contract brings staking fully on-chain.

* **Stake** STRAT → receive sSTRAT-v2 (non-transferable receipt token)
* **Earn** esETH rewards streamed linearly over 7-day periods
* **Unstake** at any time — auto-claims pending rewards, no lock period
* **Migrate** to a new address without losing accrued rewards

The 7-day streaming design prevents frontrunning: you can't deposit right before a reward distribution, collect, and leave. New rewards blend with any undistributed balance and stream linearly, so earlier stakers always retain their accrued yield.

For the full mechanics, see [STRAT Staking](https://docs.ethstrat.xyz/core-mechanics/strat-staking).

## Note Conversion

**Currently:** Conversion of notes is permissioned.

**Upcoming:** Note holders can permissionlessly exercise their conversion rights through two paths:

1. **Convert to STRAT** (before expiry) — burn CDT against your NFT to receive STRAT at the entitlement rate set when you bonded.
2. **Convert to esETH** (before expiry) — burn CDT against your NFT to receive esETH from the protocol's encumbered holdings.

After expiry, remaining CDT redeems for its USD notional value paid in esETH — pro-rata if the protocol is underwater.

Partial conversion is supported: exercise a portion of your note now, keep the rest for later. The NFT tracks remaining entitlements.

For the full mechanics, see [Conversion of Notes](https://docs.ethstrat.xyz/core-mechanics/conversion-of-notes).

## What's Not in This Release

**Treasury Lending** — borrowing esETH against STRAT + CDT collateral at fixed rates — is on the [roadmap](https://docs.ethstrat.xyz/introduction/roadmap) for Q2 2026. It is not part of this release.

## Security

Audits for the upcoming release are in progress and will be published alongside the code before permissionless launch. For current audit status, see [Audits](https://docs.ethstrat.xyz/security-and-risk/audits).