ether.fi (ETHFI)
ether.fi (ETHFI): Decentralized Liquid Restaking on Ethereum
ether.fi is a decentralized and non-custodial liquid restaking protocol operating on the Ethereum blockchain. Its primary function is to allow ETH holders to stake their assets and participate in the consensus mechanism without sacrificing liquidity or control over their private keys. By integrating with EigenLayer, ether.fi enables users to "restake" their staked ETH, securing other protocols and earning additional rewards. This process enhances capital efficiency and contributes to the overall security of the broader Web3 ecosystem.
When a user stakes ETH through ether.fi, they receive eETH, a native liquid restaking token. This token represents their staked ETH plus all accrued staking and restaking rewards. Unlike traditional staking, where assets are locked, eETH is a liquid ERC-20 token that can be freely traded, transferred, or used as collateral in various DeFi applications. This unique feature allows stakers to maximize their yield potential by engaging with other protocols while their underlying assets continue to secure the Ethereum network and other integrated services.
Technology
The core technology of ether.fi revolves around a system of non-custodial smart contracts and its integration with the EigenLayer protocol. When users deposit ETH, the protocol mints an equivalent amount of eETH, a liquid restaking token. Crucially, ether.fi is designed so that stakers maintain control of their keys, a key differentiator promoting decentralization and security. The protocol operates a permissionless network of node operators, further decentralizing the staking process. Through EigenLayer, the staked ETH is re-hypothecated to provide security for other networks and services, a process known as restaking, which generates additional yield for the stakers.
Tokenomics
The ether.fi ecosystem features two primary tokens: eETH and ETHFI. The eETH token is a liquid restaking token that accrues value from Ethereum staking rewards and EigenLayer restaking points. Its supply is elastic and corresponds to the total amount of ETH staked through the protocol. In contrast, ether.fi (ETHFI) is the native governance token with a fixed total supply. ETHFI token holders can participate in the protocol's governance, voting on key decisions such as protocol upgrades, treasury management, and fee structures. A significant portion of the ETHFI supply was distributed to the community through airdrops to incentivize early adoption and decentralize governance.
Ecosystem
ether.fi is a prominent player within the rapidly growing Liquid Restaking Token (LRT) sector, which is built upon the foundation of EigenLayer's restaking primitive. It competes with other LRT protocols like Puffer Finance and Kelp DAO. The unique selling proposition of ether.fi is its steadfast commitment to decentralization and its non-custodial approach, where users never relinquish control of their keys. The protocol's native token, eETH, is deeply integrated into the DeFi ecosystem, finding utility on lending platforms, liquidity pools, and yield farming strategies, thereby amplifying its value proposition for users seeking to maximize capital efficiency.
Frequently Asked Questions
ether.fi is a decentralized, non-custodial liquid restaking protocol on Ethereum. It allows users to stake ETH, receive a liquid token (eETH) in return, and earn rewards from both Ethereum staking and EigenLayer restaking, all while maintaining control of their keys.
The ether.fi (ETHFI) governance token can be purchased on major cryptocurrency exchanges. To buy ETHFI, you need to create an account on an exchange that lists the token, deposit funds (like fiat currency or another crypto), and then place a buy order for ETHFI.
ETHFI is the governance token of the ether.fi protocol, used for voting on proposals and managing the treasury. eETH is the liquid restaking token users receive when they stake ETH through ether.fi. eETH represents the staked ETH plus accrued rewards and can be used in DeFi.
When you stake ETH with ether.fi, you receive the eETH token. Your staked ETH is used to help secure the Ethereum network. Through EigenLayer, this same staked ETH is "restaked" to provide security for other protocols, earning you additional rewards. The eETH token remains liquid for you to use elsewhere.
ether.fi prioritizes security by being non-custodial, meaning you always retain control of your private keys. The protocol's smart contracts are audited to minimize risks. However, like any DeFi protocol, it involves inherent risks, including smart contract vulnerabilities and slashing penalties.
EigenLayer is a protocol that introduces "restaking" to Ethereum. ether.fi is built on top of EigenLayer, allowing the ETH staked through its platform to be re-used to secure other applications (Actively Validated Services). This generates additional yield for ether.fi stakers.
eETH is a composable ERC-20 token. You can use it across the DeFi ecosystem as collateral for borrowing, to provide liquidity in automated market makers (AMMs), or in various yield farming strategies to generate further returns on top of your staking and restaking rewards.
The primary utility of the ether.fi (ETHFI) token is governance. Holders can vote on key decisions that shape the future of the protocol, including fee structures, node operator selection criteria, and the allocation of treasury funds. It gives the community control over the platform's development.
