EtherFi is the dominant liquid restaking protocol built on top of EigenLayer. While EigenLayer introduced restaking (re-using staked ETH as collateral for additional services), it launched without native liquid tokens. EtherFi solved this by issuing eETH — a liquid restaking token (LRT) that represents ETH staked through EtherFi and restaked on EigenLayer simultaneously. Users earn: (1) Ethereum base staking rewards (~4% APY), (2) EigenLayer restaking rewards, and (3) EtherFi’s own point/token rewards. Founded by Mike Silagadze in 2022, EtherFi launched in late 2023 and grew to $5B+ in TVL by mid-2024.
What Makes EtherFi Different
The following sections cover this in detail.
Non-Custodial Validator Key Design
Most liquid staking protocols (Lido, Rocket Pool) take custody of users’ ETH to run validators. EtherFi’s innovation:
- Users deposit ETH → EtherFi pairs with a node operator
- The user retains their validator withdrawal key (not the node operator)
- Node operators use a distributed key sharding system — they can operate but cannot withdraw
- Result: True non-custodial staking — EtherFi can’t rug-pull your balance
This is different from Lido where you fully trust Lido’s smart contracts and validators with your ETH.
eETH and weETH
eETH (EtherFi’s liquid staking token):
- 1 eETH ≈ 1 ETH (rebasing token — balance automatically grows as rewards accumulate)
- Represents ETH staked through EtherFi + restaked on EigenLayer
- Yield: base ETH staking (~4%) + EigenLayer AVS rewards (variable)
weETH (wrapped eETH):
- Non-rebasing version of eETH (price appreciates vs. ETH rather than balance growing)
- Used in DeFi (most DeFi protocols can’t handle rebasing tokens)
- weETH used as collateral in Aave, Morpho, Compound, Spark
- ERC-4626 vault token: weETH price increases relative to ETH over time as rewards compound
EigenLayer Integration
EtherFi is EigenLayer’s largest liquid restaking partner:
- All EtherFi ETH is restaked into EigenLayer
- When EigenLayer AVSes (Actively Validated Services) launch and distribute rewards, eETH holders receive them
- Point system (pre-token): EtherFi distributed “loyalty points” to eETH holders; EigenLayer distributed “restaking points” — both systems rewarded early restakers ahead of token launches
- eETH holders received ETHFI airdrop + EIGEN airdrop based on points accumulated
ETHFI Token
EtherFi’s governance and utility token:
- Airdrop: March 2024; early users received ETHFI based on loyalty points
- Total supply: 1 billion ETHFI
- Revenue sharing: ETHFI stakers can receive a share of EtherFi’s protocol revenue (6% of staking rewards)
- Governance: Controls EtherFi DAO and protocol parameters
Revenue model:
EtherFi takes a 10% fee on staking rewards:
- 5% to node operators
- 5% to EtherFi protocol (split between DAO treasury and ETHFI stakers)
Cash Card Product
EtherFi launched Cash — a credit/debit card product allowing eETH holders to:
- Spend yield while their principal continues staking
- Pay expenses with a Visa-branded card funded by eETH yield
- No liquidation of principal required for spending
This “DeFi debit card” product is a narrative differentiator attempting to bridge DeFi yield to real-world spending.
Comparison: EtherFi vs. Lido
| Feature | EtherFi | Lido |
|---|---|---|
| Key custody | User retains withdrawal key | Lido holds keys |
| EigenLayer restaking | Yes (native) | Via Symbiotic (separate) |
| Token | ETHFI | LDO |
| TVL (mid-2024) | $5B+ | $30B+ |
| LRT issuance | eETH / weETH | wstETH (not an LRT) |
| Governance decentralization | Developing | More mature DAO |
Liquid Restaking Token Ecosystem
EtherFi is the largest but competes with:
- Renzo (ezETH): Second-largest LRT; significant growth 2024
- KelpDAO (rsETH): Third LRT tier
- Puffer Finance (pufETH): Anti-slashing LRT design
- Swell (swETH/rswETH): Swell Chain (AltLayer-based L2)
- Bedrock (uniETH): Smaller but growing
The LRT landscape consolidated quickly — EtherFi’s early lead and ETHFI airdrop gave it a TVL moat.
How to Stake with EtherFi
- Visit ether.fi
- Connect an EVM wallet (MetaMask, Coinbase Wallet)
- Deposit ETH → receive eETH immediately
- Optionally: wrap eETH into weETH for DeFi use
- Use weETH in Aave, Morpho, or Pendle as collateral or yield-bearing asset
Acquire ETH via . Store multiple tokens including weETH securely with .
Social Media Sentiment
EtherFi is generally well-regarded in the ETH staking community for its non-custodial design principle — retaining user withdrawal keys is a genuine safety innovation over Lido’s model. The ETHFI airdrop was considered fair relative to many 2024 airdrops; early and medium users all received meaningful allocations. Critics note that EigenLayer restaking rewards were initially minimal (most AVSes not yet launched) — so the “extra restaking yield” narrative outpaced actual delivered yield. The Cash card product is seen as innovative for connecting DeFi yield to real-world spending but unproven at scale. The LRT sector broadly faces “points fatigue” criticism — complex multi-protocol reward systems that confused users and drove speculation rather than sustainable usage.
Last updated: 2026-04
Related Terms
Sources
Bitcoin Suisse Research. (2023). Ethereum Staking: Mechanisms, Risks, and Liquid Alternatives.
Eigenlabs. (2023). EigenLayer: The Restaking Collective. eigenlayer.xyz.
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