Ether.FI - Seamless Staking Effortless Earnings
Hey, friends!
The Dencun upgrade was utilized this week, and $ETH is lurking around $4k per token. Will we soon see ATH?
Today I wanted to take you through a LRT project that has attracted a huge TVL (over 2bn) and their token that will be listed on Binance already next week.
Let’s jump right into this deep dive of Ether.Fi (full disclosure: I am an investor in the the project).
Ether.FI - Seamless Staking Effortless Earnings
Ether.fi is a decentralized, non-custodial delegated staking protocol with a Liquid Staking token. One of the distinguishing characteristics of ether.fi is that stakers control their keys.
Okay, anon.
Let’s take a step back before we deep dive into Ether.Fi.
Because, you’ve probably heard about EigenLayer, right?
About 1/4 of all ETH in circulation is staked (120m ETH in total, approx. 30m staked).
This offers great security to Ethereum and the smart contracts running on it because an attack on Ethereum's consensus system would require lots of ETH.
With the introduction of EigenLayer’s restaking, Ethereum validators can now safeguard other protocols with their 32 ETH stake (the 32 ETH is reused). Validators won't have to unstake or add additional capital + they get extra yield. EigenLayer allows protocols outside of smart contracts to tap into Ethereum's security via restaking which was previously not possible.
EigenLayer is not a DeFi protocol. EigenLayer is a platform to bootstrap new proof of stake (PoS) systems. Through the EigenLayer protocol, users can’t engage in any financial activities such as swapping and lending.
However, for the decentralized services built on top of EigenLayer (we call them AVSs, Actively Validated Services), these services could be DeFi applications themselves or support key functionalities in other DeFi protocols. These AVSs are external to the EigenLayer contracts.
Moreover, another class of protocols built on top of EigenLayer is called liquid restaking protocols (LRT). They are permissionlessly built on EigenLayer. These are the ones degens care about. Ether.fi, Swell Network, Genesis, Puffer, Kelp ++
In this newsletter we will focus on Ether.fi, which is the biggest LRT DeFi protocol.
EtherFi offer double points through native token airdrops.
But first of all, we just got to differentiate between liquid staking and liquid restaking.
Traditional staking involves locking your assets in a smart contract, supporting the blockchain's operations, and earning staking rewards.
On the other hand, liquid staking allows you to stake your assets with a liquid staking protocol and receive a liquidity token that represents your staked assets.
Liquid restaking is a method where Liquid Staking Token (LST) holders restake by transferring their tokens into the EigenLayer smart contracts.
On the creenshot (below) you can see the biggest liquid restaking protocols (ether.fi), Puffer, Kelp, Renzo ++.
The issue with locking up money in EigenLayer is that the money isn’t liquid anymore.
But what if you are craving ETH liquidity to play around in DeFi but also want to earn EigenLayer points and not miss the potential future rewards?
With LST coins locked up on EigenLayer you lose your access to liquidity and get locked out of your ETH. But there's a solution to this problem. With @ether_fi, you can enjoy all the benefits of EigenLayer while staying liquid with their restaked LST called $eETH.
EtherFi takes your ETH, natively restakes it for you on EigenLayer, and passes on all the benefits with something more on top of it.
Let's talk about all the perks:
➜ EigenLayer Restaking points
➜ EigenLayer airdrop
➜ EtherFi restaking points
➜ ETH staking yield
Apart from these base rewards, you can wrap $eETH into $weETH and use it in DeFi to earn additional rewards.
The standard route is to Deposit ETH -> generate eETH + earn EtherFi Loyalty Points + EigenLayer points.
Use eETH to interact with different DeFi protocols and earn additional yield (eg. Pendle).
But if you go to https://app.ether.fi/defi you’ll see all the opportunities you have to receive extra yield (see the screenshot below).
Here you have the opportunity to go into yield farms on Pendle, Balancer, Gearbox, Curve, Gravita, Penpie ++
The benefit is that you get an increased boost in your Ether.Fi points (2x boost means double the amount of Ether.FI points).
Loyalty Points formula
By staking .001 Ether, you will receive 1 point / day.
This simply means that loyalty points earned = ETH staked * 1000 * days staked
Example: If you have 5 ETH staked for 6 days, you will receive 30k of loyalty points (5 * 1000 *6).
For the whales, there is a sizeable cap on total loyalty points earned of 10¹².
As for your points, you can track both your ether.fi and EigenLayer scores over time through the app.ether.fi/portfolio page.
All right, we have talked about the product and the DeFi strategies, now let’s take a look at Ether.Fi’s upcoming token ETHFI.
$ETHFI token launch
Binance will be the first platform to list the token, with trading starting at 2024-03-18 at 12:00 (UTC).
Ether.FI will be a Binance Launchpool project (which is extremely bullish btw). Binance users will be able to stake their BNB and FDUSD into separate pools to farm ETHFI tokens over four days, with farming starting from 2024-03-14 00:00 (UTC).
Max Token Supply: 1,000,000,000 ETHFI
Launchpool Token Rewards: 20,000,000 ETHFI (2% of max token supply)
Initial Circulating Supply: 115,200,000 ETHFI (11.52% of max token supply)
Also, it’s worth mentioning that if the token launches on March 18th, then the airdrop shouldn’t be too far away. At least this is what I think, but the team hasn’t announced anything about it on Twitter yet.
Honestly, I think airdropping now makes sense. None of the other protocols has been launching a token yet, and being a first-mover is probably a great strategy. There’s huge speculation about EigenLayer launching end of April too. So in general it’s happy days for Ethereum stakers.
Unstaking
We have talked a lot about staking, but what if you one day want to sell your eETH?
Unlike Ether.Fi’s biggest competitor (Puffer), you can unstake your eETH at any time.
You can unstake and withdraw your ETH by clicking the arrow button in the middle of the UI to enter “Withdraw” mode.
Unstaking takes a maximum of 4 days, but usually it’s done within 24 hours, sometimes even within 2-4 hours. The time estimate isn’t something Ether.Fi themselves can control, and depend on the validator queue.
If you don’t want to wait on unstaking, you could always sell instantly on secondary markets. eETH/weETH is a very liquid token, so if you’re in a hurry you could always go to CoinGecko and find a pool to sell to and get back ETH immediately: https://www.coingecko.com/en/coins/wrapped-eeth
Below you can see the most liquid pools: Balancer, Uniswap and Maverick.
Summary
I hope you found this read interesting, and to summarize: Ether.Fi is the biggest restaking protocol with a TVL over 2bn. The eETH token is very liquid and you can stake it directly on EigenLayer for EigenLayer points + Ether.Fi loyalty points. Or you could utilize it further in DeFi with more degen strategies like Pendle and Gearbox to earn even more yield.
Binance will be the first platform to list the token, with trading starting at 2024-03-18 at 12:00 (UTC). Ether.FI will be a Binance Launchpool project (which is extremely bullish btw) and you can stake BNB or FDUSD to farm ETHFI tokens over 4 days.
PS! The airdrop shouldn’t be too far away either.
If you want a visual explanation of Ether.Fi, make sure to check out the video below.
And if you have any questions about Ether.Fi, make sure to contact either me or the team directly on Twitter: https://twitter.com/ether_fi
All right, I guess that’s it.
See you around, anon! Stay bullish.
And here’s the video btw:
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