EtherFi has emerged as a leading force in the rapidly evolving Ethereum ecosystem, pioneering innovation in the realm of liquid restaking. As a non-custodial ETH liquid restaking protocol, EtherFi enables users to seamlessly restake their Ethereum (ETH) through EigenLayer while maintaining liquidity and maximizing yield potential. With over $2.98 billion in total value locked (TVL), it stands at the forefront of a transformative movement reshaping how stakers interact with decentralized networks.
The Rise of Restaking and EigenLayer’s Role
In June 2023, EigenLayer launched on Ethereum, introducing restaking—a groundbreaking concept that allows staked ETH or its derivatives to be reused for securing additional blockchain applications. This innovation effectively extends Ethereum’s security to other protocols and rollups, creating a modular ecosystem where trust is shared across layers.
Initially, EigenLayer supported only three liquid staking tokens (LSTs): Lido’s stETH, Rocket Pool’s rETH, and Coinbase’s cbETH. Participation came with a key limitation: a seven-day withdrawal delay, which restricted capital efficiency. Just as liquid staking solved illiquidity for standard ETH stakers, a new wave of protocols was needed to bring liquidity to EigenLayer participants.
This demand gave birth to the ETH liquid restaking subsector—a category now holding nearly $7 billion in TVL. Among these, EtherFi quickly rose to dominance by offering a seamless, user-controlled way to participate in restaking without sacrificing access to funds.
EtherFi’s Dual Mission: Accessibility and Decentralization
Long before EigenLayer’s debut, EtherFi was already building infrastructure to democratize Ethereum staking. Recognizing that running a validator node requires either 32 ETH or advanced technical knowledge, EtherFi set out to lower these barriers through two core initiatives:
- Non-custodial staking services – Users can stake ETH in 32 ETH increments using trusted node operators while retaining full control over withdrawal keys.
- Distributed Validator Technology (DVT) integration – Launched in August 2023, this decentralized approach splits validator responsibilities across multiple independent operators, enhancing network resilience and reducing single points of failure.
Under its DVT framework, EtherFi offers two participation paths:
- Permissionless Staking: Users contribute hardware and a 2 ETH bond. EtherFi provides technical support and covers the remaining 30 ETH required for validation.
- Operation Solo Staker: A KYC-based program where qualified users operate nodes with no ETH bond required—EtherFi supplies the full 32 ETH stake.
These strategies have enabled EtherFi to distribute node operations globally, promoting geographic and operational decentralization while making validator participation accessible to a broader audience.
👉 Discover how liquid restaking can unlock your staking potential today.
Introducing eETH: The Power of Liquid Restaking
EtherFi’s integration with EigenLayer marked a turning point in its growth. By enabling users to deposit their LSTs (like stETH or rETH) into EigenLayer, EtherFi issues eETH, a liquid restaking token representing the user’s combined staked and restaked position.
Key features of eETH include:
- Auto-compounding rewards via rebase mechanism
- Accrual of both base staking yield and EigenLayer restaking rewards
- Eligibility for EigenLayer Points and EtherFi loyalty incentives
For DeFi integration, users can wrap eETH into weETH (Wrapped eETH)—a version compatible with most decentralized finance platforms. This opens up numerous yield-generating opportunities:
- Deposit weETH into liquidity pools on Balancer or Curve Finance
- Lend weETH on money markets like Morpho Blue and Silo Finance
- Use in automated vaults such as Sommelier Finance
- Gain leverage via protocols like Gearbox Protocol
- Further restake on emerging ecosystems like Zircuit
This composability makes weETH one of the most versatile assets in the restaking economy.
Native Restaking: A Competitive Edge
Unlike many competitors constrained by EigenLayer’s deposit caps, EtherFi leverages native restaking—a direct integration that bypasses queue-based limitations. This allows users to begin earning EigenLayer rewards immediately, without waiting for periodic cap increases.
This strategic advantage not only boosted user adoption but also solidified EtherFi’s position as the top liquid restaking protocol by TVL. By maximizing reward accrual from day one, EtherFi delivers superior capital efficiency—a critical factor in competitive DeFi markets.
Governance and Tokenomics: The ETHFI Launch
To further decentralize control, EtherFi introduced its native governance token: ETHFI. Listed on Binance via a Launchpool event in March, ETHFI has a maximum supply of 1 billion tokens, with 11.52% initially circulating.
Token allocation breakdown:
- 32.5% to Investors & Advisors
- 23.26% to Team
- 27.24% to DAO Treasury
- 11% reserved for future airdrops
- 2% distributed via Launchpool
Most team and investor tokens will unlock linearly starting in 2025, extending through 2028—a structure designed to align long-term incentives.
The launch coincided with the formation of the EtherFi DAO, empowering ETHFI holders to vote on protocol upgrades, treasury management, and future integrations.
👉 Learn how next-gen staking protocols are redefining yield opportunities.
Frequently Asked Questions (FAQ)
Q: What is liquid restaking?
A: Liquid restaking allows users to stake their already-staked ETH (via LSTs like stETH) with EigenLayer while receiving a liquid token (e.g., eETH) that can be used across DeFi—unlocking yield from both staking and restaking simultaneously.
Q: How does eETH earn yield?
A: eETH automatically rebases to reflect accrued rewards from both Ethereum’s base staking rate and additional yields generated through EigenLayer restaking. Holding eETH also grants eligibility for EigenLayer Points and EtherFi loyalty rewards.
Q: Is EtherFi custodial?
A: No. EtherFi operates as a non-custodial protocol, meaning users retain control of their private keys and withdrawal credentials at all times.
Q: Can I use eETH in DeFi?
A: Yes. By wrapping eETH into weETH, you can use it in various DeFi protocols for lending, liquidity provision, leveraged positions, and more.
Q: What is the difference between eETH and weETH?
A: eETH is the native liquid restaking token issued by EtherFi. weETH is its ERC-20 wrapped version optimized for compatibility across DeFi platforms.
Q: How do I get ETHFI tokens?
A: Initial distribution occurred through Binance Launchpool by staking BNB or FDUSD. Future allocations may include airdrops and ecosystem incentives.
👉 Start exploring high-yield DeFi strategies with cutting-edge restaking tools.
Final Thoughts
EtherFi represents a paradigm shift in Ethereum staking—merging accessibility, decentralization, and composability into a single powerful protocol. By enabling native liquid restaking, integrating DVT for node resilience, and launching a community-driven DAO with the ETHFI token, EtherFi is shaping the future of trust-minimized infrastructure.
As modular blockchains and shared security models gain traction, protocols like EtherFi will play an increasingly central role in connecting layers, securing rollups, and empowering users with unprecedented financial flexibility. Whether you're a seasoned DeFi user or new to staking, understanding EtherFi’s model offers valuable insight into where crypto’s next evolution is headed.