Ether.fi (ETHFI)

Ether.fi (ETHFI) is the governance token of ether.fi, a protocol for liquid restaking of ether that has grown into a wider crypto finance app with a payment card. Users deposit ETH and receive a token, eETH, that earns staking and restaking rewards while staying free to use elsewhere. Holders of ETHFI vote on how the protocol is run and how its treasury is used.

ETHFI is the governance token; eETH and its wrapped form weETH are the receipts for staked ETH, and they are separate assets that track the value of ether. Ether.fi is one of several projects offering liquid staking, but it is built around restaking, in which the same staked ETH is also pledged to secure other services in return for extra rewards. It was founded in 2022 by Mike Silagadze, its chief executive.

Imagine putting money into a long-term deposit that pays interest but locks the money up. Ether.fi gives you a receipt for the deposit that you can still spend, lend or trade, and the receipt keeps earning while you hold it. With restaking, the same deposit is also rented out as a security guarantee to other online services, which pay a little extra for the comfort.

The company has since added the things a bank account offers. A card lets people pay in shops using their crypto balance, or borrow against it rather than sell it, much as a homeowner might borrow against a house instead of selling it. The ETHFI token does not hold anyone's deposit. It gives holders a say in the rules and in how the project's money is spent.

Ether.fi launched its eETH token in late 2023, when restaking on EigenLayer, the first large restaking platform, was drawing heavy demand. Depositors earned points that later counted towards a share of the governance token. ETHFI began trading on 18 March 2024, the same day the first airdrop claim window opened; Binance also offered it through its Launchpool programme from 14 March. A second airdrop season followed later in 2024.

In May 2024 the company announced plans for a Visa card linked to users' holdings, and the card, ether.fi Cash, began shipping to customers in September 2024, using the Scroll network to settle payments. The company now describes itself as a non-custodial crypto neobank, adding savings vaults, borrowing and trading alongside staking.

When a user deposits ETH, ether.fi stakes it through validators on Ethereum's proof of stake network, run by independent node operators, and restakes it to earn additional rewards. eETH is a rebasing token: the number of tokens in a wallet rises as rewards are added. Many DeFi applications cannot handle balances that change by themselves, so eETH can be wrapped into weETH, whose number stays fixed while its value grows. The conversion is:

• $\text{weETH amount}$ is the number of wrapped tokens being converted.
• $\text{Exchange rate}$ is how much eETH one weETH is currently worth; it only rises, as rewards accumulate.
• $\text{eETH received}$ is the amount returned on unwrapping, each eETH being redeemable for about one ETH.

For example, if a user wrapped 10 eETH when the rate was 1.00 and later unwraps when the rate is 1.04, they receive $10 \times 1.04 = 10.4$ eETH. The 0.4 eETH difference is the staking and restaking reward earned in between. Because weETH keeps a fixed balance, it is widely used as collateral in lending protocols such as Aave and Morpho, and in yield markets such as Pendle.

ETHFI has a fixed total supply of 1 billion tokens. At launch, 11 percent was set aside for the two airdrop seasons, with the rest allocated to investors, core contributors, the treasury and partners and released over time. The token is used for governance of the protocol, including decisions on fees and treasury spending, and holders can also stake it in the protocol.

• Staking without lock-up. Users earn Ethereum staking rewards while keeping a token they can sell or use.
• Collateral. weETH is accepted as collateral across DeFi lending and borrowing markets.
• Spending. The Cash card lets holders pay merchants from their balance, or borrow against crypto instead of selling it, through Visa's card network.
• Governance. ETHFI holders propose and vote on changes to the protocol.

Restaking adds layers of risk on top of ordinary staking. Staked ETH can be cut, or slashed, if a validator misbehaves, and restaking exposes it to the rules of extra services as well. eETH and weETH can trade below the value of ETH in stressed markets, and smart-contract flaws in ether.fi or the protocols that accept its tokens could cause losses. Ether.fi states that it is not a regulated financial institution: its card is issued by a separate licensed issuer, and some products are not offered in every country. Token holders also face large scheduled unlocks of investor and team allocations.

• ether.fi
• ether.fi documentation