Although ETH has performed poorly recently, for loyal holders who still hold ETH, it is a topic worthy of careful study if you want to steadily increase the value of ETH.
First of all, considering security and liquidity, the best opportunity for increasing ETHs ultra-low-risk coin standard should be Ether.fi. The actual rate of return of Ether.fi is 5.8%, which is significantly higher than other similar protocols.
According to Pendle’s calculations, tETH is a new protocol that has not been tested by the market, and BearChain requires a certain lock-up period. Therefore, Ether.fi’s Symbiotic pool is the protocol with the highest yield besides the above two protocols.
Let’s dive in:
About Ether.fi
Ether.fi is a decentralized staking protocol based on the Ethereum blockchain. Ether.fi offers native restaking, where staking rewards are automatically compounded to generate higher returns. This feature helps users maximize their returns without manual intervention. Ether.fi aims to make staking in the Ethereum ecosystem more accessible, efficient, and decentralized.
Key functions and features
One of the main features of Ether.fi is the liquidity staking feature. Instead of locking up ETH for a long time, users can obtain liquidity tokens such as eETH (ETH staked on ether.fi) by staking ETH. These tokens represent the staked ETH, and users can trade or use them in various DeFi applications, providing greater flexibility and liquidity.
How it works
Seamless staking, earning returns: Users can stake their ETH through the Ether.fi protocol. When users stake their ETH on the Ether.fi protocol, they receive an equal amount of liquidity tokens (eETH). eETH is a native re-staking liquid staking token that entitles holders to staking rewards generated by the underlying staked ETH while maintaining liquidity and participating in various DeFi.
These rewards automatically compound within the Ether.fi protocol, maximizing the earning potential for eETH holders.
Ether.fi uses a liquid staking mechanism that allows users to stake their ETH without locking it for a long time. Compared with traditional staking methods, this feature provides users with greater flexibility and liquidity.
Governance Token: ETHFI is the governance token that drives the ether.fi network. By holding ETHFI tokens, users can vote on proposals, upgrades, or parameter changes, thereby ensuring a decentralized and community-driven governance model and ensuring a more inclusive and democratic approach to protocol management.
Why choose Ether.fi?
Ether.fi offers several key advantages to users looking to participate in decentralized staking on the Ethereum blockchain, including:
(1) Strong liquidity
It allows users to pledge less than 32 ETH to Ether.fi and automatically receive an equal amount of eETH or weETH minted by the protocol. These tokens can be traded freely and can be quickly exchanged back to ETH or other crypto assets when liquidity is needed.
(2) Multi-scenario application
eETH and weETH have the attributes of ERC-20 tokens. In addition to holding them to obtain liquidity pool returns, they can also be used in various DeFi platforms, such as lending, liquidity provision, or as a medium of exchange, expanding the users operating scope and potential benefits in the Ethereum ecosystem.
(3) Staking Rewards + Restaking Income
Users can use Ether.fi to stake their ETH to re-staking protocols such as EigenLayer, Symbiotic and Karak. These ETH can obtain corresponding staking rewards. These rewards will automatically accumulate and compound, bringing more benefits to users over time.
Through the above advantages, Ether.fi aims to make staking more convenient, efficient, and decentralized for users in the Ethereum ecosystem, and maximize staking returns.
Solid growth trajectory
Explosive growth of TVL: As of January 14, 2025, EtherFi’s TVL (total locked value) has reached ~$8.5 billion, making it the 4th largest project in the entire ETH network including L2, with excellent security. It has the highest adoption rate and the fastest growth rate among all liquidity staking projects.
Reliable team background
Ether.fi completed a $5.3 million financing on February 2, 2023, led by North Island Ventures, Chapter One and Node Capital, with participation from BitMex founder Arthur Hayes. On February 27, 2024, Ether.fi completed a $27 million Series A financing, led by Bullish and CoinFund, demonstrating the rapid expansion trend of the protocol and investor confidence.
Currently, Ether.fi has published information on five team members in official documents. Among them, founder Mike Silagadze is currently the CEO of DeFi fund company Gadze Finance and the founder of Canadian higher education platform Top Hat (US$130 million in Series E financing in 2021). Judging from the successful entrepreneurial experience of the founder of Ether.fi, he has both business operations and knowledge and experience in the field of encryption, and is capable of efficiently executing and expanding the scale of EtherFi, ensuring that EtherFis operations and innovations can meet the needs of the encryption ecosystem.
Additionally, the Ether.fi team adheres to 3 guiding principles:
First, we make decentralization our primary goal and will never compromise on the non-custodial and decentralized nature of the protocol.
Second, the Ether.Fi protocol has a sustainable revenue model and is in it for the long term, and the team thinks and plans with a long-term perspective.
Third, we will uphold professional ethics and always do the right thing for the Ethereum community.
Composition of pledge income
Ether.fi staking income mainly consists of the following parts:
(1) Ethereum network staking rewards: Currently, the annualized yield of Ethereum staking is around 2.7%.
(2) Re-staking income : Ether.fi re-stakes the users staked ETH to other protocols or verification nodes such as EigenLayer and Symbiotic to obtain additional rewards. These rewards may be issued in the form of the projects own tokens, such as Eigen, ETHFI, etc., or in the form of governance tokens or income certificate points in other protocols.
(3) MEV income: In the Ethereum network, nodes can earn fees in the process of packaging and sorting transactions, including priority fees given by users and MEV income. As a node operator, Ether.fi will return part of the transaction sorting income to the staking users, but this part of the income has a certain degree of uncertainty, which depends on the activity of the Ethereum network and transaction congestion.
(4) Liquidity mining rewards: In the Ether.fi liquidity pool, users will receive corresponding liquidity tokens, such as eETH or weETH, after staking ETH. These tokens can participate in liquidity mining and provide liquidity in other DeFi protocols, thereby obtaining additional mining rewards. The rewards are usually in the form of governance tokens of the relevant DeFi protocol or a share of transaction fees.
(5) Airdrops and other incentives: Ether.f will launch airdrop activities or other incentives from time to time to attract users to participate in staking. For example, during a specific period, every time a certain amount of ETH is staked, the airdrop bonus pool will increase by a certain percentage of the total number of tokens, and users will have the opportunity to receive additional ETHFI tokens or airdrop rewards from other cooperative projects.
Conclusion: According to the mainstream and secure ETH LRT solutions currently on the market, the rate of return provided by Ether.fi is one of the highest.
Estimation of regular staking income
Among the current mainstream ETH staking protocols, Ether.fi’s Symbiotic pool has the highest yield in the entire network, which is estimated to be up to APR 6-10%.
Symbiotic is the biggest competitor of EigenLayer. Ether.fi x Symbiotic can mine four things:
-ETH comes with a 2.7% yield;
-Ether.fi credits;
-Symbiotic points;
-Veda points.
Note: The above APR takes into account the potential value of the above points, and they can be deposited and withdrawn flexibly, so you can withdraw funds at any time when you need them.
You can deposit directly on the Ether.fi front-end, portal: https://app.ether.fi/weeths .
summary
The DeFi application scenario design of Ether.fis eETH enables it to have more DeFi application directions and upper-level revenue superposition mechanisms to achieve better expansion and allow more users to participate in Ether.fi. Overall, as a derivative product in the LSD track, Ether.fi has innovative design in key management. Its yield advantage and ease of use have helped it obtain considerable TVL, and it is currently the best yield place for ETH.
