What Is Ether.fi?
Ether.fi is a decentralized protocol designed to enhance Ethereum staking through liquid staking and restaking solutions. By staking ETH, users can mint eETH, a liquid token that accumulates staking rewards, EigenLayer restaking yields, and loyalty incentives—all while maintaining full composability within the DeFi ecosystem.
The platform stands out with its commitment to decentralization and user control. It supports non-custodial staking with user-managed validator keys, significantly reducing counterparty risk. Additionally, Ether.fi promotes network resilience through Operation Solo Staker, a permissionless node operation program that strengthens Ethereum’s security and geographic diversity.
Beyond staking, Ether.fi offers innovative financial tools such as Liquid Vaults for automated yield generation and a crypto-backed spending card for borrowing and everyday transactions. With over $8 billion in total value locked (TVL), Ether.fi ranks among the largest DeFi protocols by assets under management.
How Ether.fi and eETH Work
Ether.fi operates as a non-custodial staking solution, allowing users to stake ETH while retaining ownership of their validator keys. This model leverages Distributed Validator Technology (DVT) to improve security and decentralization across the network.
When users stake ETH, they receive eETH, a liquid staking token that represents their staked position and accrues rewards in real time. This enables continuous participation in DeFi activities—such as lending, liquidity provision, or yield farming—without locking up capital.
Here’s how the process works:
- ETH Deposit: Users deposit ETH into the Ether.fi smart contracts to initiate staking.
- Validator Key Management: Users generate their own validator keys, which are encrypted and securely shared with node operators. This ensures users retain control over their validators.
NFT Representation: Each validator is represented by two NFTs:
- T-NFT (Transferable NFT): Represents economic ownership of 30 ETH and is transferable.
- B-NFT (Binding NFT): Grants operational control (e.g., monitoring, exiting) for 2 ETH and is non-transferable.
- Staking & Restaking: The deposited ETH is used for Ethereum consensus layer staking, earning base staking rewards. Simultaneously, it can be restaked via EigenLayer to earn additional yield from AVSs (Actively Validated Services).
- Liquid Staking: In return, users receive eETH, which can be freely traded or deployed across DeFi protocols.
- Node Operations: Users can either run their own nodes via permissionless staking or participate in Ether.fi’s Solo Staker program, which simplifies node setup and maintenance.
This architecture empowers users with full control, enhanced security, and maximized yield potential—all critical features in modern DeFi infrastructure.
What Are Liquid Vaults?
Ether.fi’s Liquid Vaults are automated yield-generating vaults that allow users to deposit assets like eETH, weETH, WETH, or stablecoins (USDC, DAI, USDe) and earn optimized returns with minimal effort.
These vaults dynamically allocate funds across top-tier DeFi protocols such as AAVE, Pendle, and Uniswap V3, using sophisticated strategies to maximize yield while managing risk. Built on Veda’s smart contract framework, the vaults include automated risk monitoring and programmatic exit mechanisms during volatile market conditions.
Popular vaults currently available include:
- Liquid ETH Yield Vault: Delivers an 8.2% APY by deploying eETH in high-efficiency DeFi strategies. With $557 million in TVL, it's one of the most trusted options for ETH holders.
- Market-Neutral USD Vault: Offers a 17.9% APY on stablecoin deposits using diversified, low-correlation strategies to minimize exposure to crypto volatility.
- UltraYield Stablecoin Vault: Targets a 30% APY using advanced market-neutral tactics focused on consistent, stable returns.
By combining automation with deep DeFi integration, Liquid Vaults lower the barrier to entry for yield optimization—making professional-grade strategies accessible to all users.
👉 See how automated vaults can turn passive holdings into active income streams across DeFi.
Frequently Asked Questions
Q: What is eETH?
A: eETH is Ether.fi’s liquid staking token. When you stake ETH with Ether.fi, you receive eETH in return, which represents your staked position and earns rewards from both Ethereum staking and EigenLayer restaking.
Q: How does restaking work on Ether.fi?
A: After staking ETH, users can opt into restaking via EigenLayer. This allows their stake to secure additional services (AVSs), earning extra yield on top of standard staking rewards.
Q: Is Ether.fi non-custodial?
A: Yes. Users maintain control of their validator keys, ensuring true non-custodial staking with no reliance on centralized intermediaries.
Q: Can I use eETH in other DeFi platforms?
A: Absolutely. eETH is fully composable and can be used across various DeFi applications for lending, trading, liquidity provision, or yield farming.
Q: How are Liquid Vaults different from regular staking?
A: Unlike traditional staking, Liquid Vaults automate complex yield strategies across multiple protocols. They rebalance positions dynamically to optimize returns while incorporating risk controls.
Q: What happens if a vault incurs a loss?
A: Vaults use smart contract safeguards, including real-time risk monitoring and automatic exits during adverse conditions. While no system is risk-free, these measures aim to protect capital integrity.
Ether.fi Protocol Revenue Model
Ether.fi generates revenue through a transparent fee structure tied directly to staking rewards. The protocol charges a 10% commission on all staking and restaking yields:
- 5% goes to the protocol treasury to fund development and ecosystem growth.
- 5% is distributed to node operators as an incentive for reliable infrastructure support.
This sustainable model aligns incentives between users, operators, and the protocol itself.
Additionally, Ether.fi operates a node services marketplace, where stakers and operators can connect directly. Revenue from service fees is shared among participants and the protocol, creating a self-sustaining economic loop that supports long-term scalability.
Tokenomics of ETHFI
The ETHFI token serves as the governance token for the Ether.fi protocol. It grants holders voting rights over key decisions such as protocol upgrades, treasury allocations, and new product launches.
With a fixed total supply of 1 billion ETHFI, only 11.52% was initially circulating at launch. Future emissions are strategically planned to support ongoing development and attract more staked assets to the platform.
Initial token distribution:
- Core Contributors: 23.26% (vested over 3 years)
- DAO Treasury: 27.24% (funds development and community initiatives)
- User Airdrops: 11% (rewards early adopters)
- Partnerships: 6% (ecosystem expansion)
- Investors: 32.5% (vested over 2 years)
This balanced allocation supports decentralization while ensuring long-term alignment between stakeholders.
Founding Team Behind Ether.fi
Ether.fi was co-founded by Mike Silagadze, CEO, a seasoned entrepreneur who previously founded Top Hat, an education technology company serving millions of users globally. He holds a degree in Electrical Engineering from the University of Waterloo and has served as a venture partner at Ripple Ventures.
The leadership team includes experienced professionals such as:
- Rok Kopp – Chief Customer Officer
- Rupert Klopper – VP of Engineering
- Seongyun Ko – Director of Engineering
- Jozef Vogel – COO
Together, they bring deep expertise in engineering, product development, and decentralized systems—critical for scaling a next-generation staking platform.
Final Thoughts
Ether.fi delivers a powerful combination of security, decentralization, and yield optimization for Ethereum stakeholders. By offering user-controlled validator keys, liquid staking via eETH, and automated yield through Liquid Vaults, it removes traditional trade-offs between safety and return.
Its sustainable revenue model and community-driven governance via the ETHFI token position it for long-term growth in the evolving restaking economy.
Whether you're looking to maximize ETH yield or integrate staked assets into DeFi seamlessly, Ether.fi provides a robust, transparent solution built for the future of decentralized finance.