What Is ether.fi (ETHFI)?
Launched in 2023, ether.fi (ETHFI) is a decentralized liquid staking protocol built on the Ethereum network. It's designed to provide users with a simple, secure, and rewarding way to participate in Ethereum staking. Since its launch, ether.fi has rapidly gained traction, amassing a market cap of over $200 million and securing substantial backing from prominent venture capital firms like Paradigm, Coinbase Ventures, and North Island Ventures.
The ETHFI token is the governance token of the ether.fi protocol. Holding ETHFI tokens gives you voting rights in the ether.fi DAO (Decentralized Autonomous Organisation), allowing you to participate in decisions about the protocol's future.
Key Concepts and Project Terms
For those new to the crypto scene or seasoned traders looking to diversify, understanding the key concepts and terms behind ether.fi is essential. Here's a breakdown:
Liquid Staking: Traditional Ethereum staking requires locking up your ETH for a set period, limiting your flexibility. ETHFI solves this with liquid staking, allowing you to stake your ETH while still having access to its liquidity through liquid staking tokens (LSTs).
Liquid Staking Tokens (LSTs): When you stake ETH with ether.fi, you receive ETHFI tokens in return. These LSTs represent your staked ETH and can be used in various DeFi applications, such as lending, borrowing, and yield farming.
Staked ETH (stETH): stETH is a token that represents your staked ETH on the Lido platform. It's a popular LST that can be used in various DeFi applications, such as providing liquidity on Curve Finance's stETH/ETH pool, lending stETH on Aave to earn interest, or using it as collateral for minting stablecoins on MakerDAO.
Minting eETH: When you deposit stETH on ether.fi, you receive eETH in return.
eETH is a liquid staking token unique to ether.fi that tracks the value of your stETH and allows you to earn additional rewards.
Node Operators: These are the entities responsible for running the Ethereum validators that secure the network. ether.fi has a decentralized network of node operators, ensuring the security and reliability of the protocol.
Who Created ether.fi?
ether.fi is the brainchild of ether.fi Labs, a team of seasoned blockchain developers and DeFi experts. The company's mission is to make Ethereum staking more accessible, rewarding, and liquid for everyone.
Notable Founders and Investors:
Mike Silagadze: Co-Founder & CEO, with a strong background in blockchain technology and entrepreneurship.
Tim Frost: Co-Founder & CTO, a seasoned software engineer and blockchain developer.
Investors: ether.fi has garnered $23 million in Series A funding from prominent investors in the crypto space,including:
Paradigm
North Island Ventures
Maven 11
Variant
Coinbase Ventures
Furthermore, ether.fi secured a $500M restaking deal with RedStone Oracles and a $600M deal with Omni Network, demonstrating substantial business growth and increased operational capacity. These investors' confidence in ether.fi reflects the project's potential to transform Ethereum staking and contribute to the broader DeFi ecosystem.
How Does ether.fi Work?
ether.fi operates as a decentralized non-custodial delegated liquid staking protocol Unlike traditional staking, where your ETH is locked up, ether.fi's approach allows you to receive liquid staking tokens (LSTs) that can be used in various DeFi applications, maximising your yield.
Here's a step-by-step guide on how ether.fi works:
Acquire stETH: You can directly stake your ETH on ether.fi and receive eETH (ether.fi's liquid staking token) in return. Alternatively, if you already have stETH, you can use that as well. If you don't already have stETH, you can easily acquire it by staking your ETH on Lido Finance. Lido is a leading liquid staking platform that allows you to stake ETH and receive stETH in return. stETH, unlike staked ETH, remains liquid and can be used in various DeFi applications, offering additional opportunities to earn yield.
Deposit stETH on ether.fi: Once you have stETH, deposit it into the ether.fi smart contract. This eliminates any technical barriers associated with running your own validator node, as ether.fi handles the complexities for you.
Mint eETH: In return for your stETH deposit, ether.fi mints an equivalent amount of eETH (ether.fi ETH). This eETH is a unique liquid staking token that represents your share in the ether.fi stETH pool.
Use Cases of eETH
eETH, being a liquid staking token, offers a range of exciting possibilities within the DeFi ecosystem:
Providing Liquidity: Deposit eETH into liquidity pools on decentralized exchanges (DEXs) like Uniswap or Curve Finance. This allows you to earn trading fees and potentially additional LP token rewards, further amplifying your returns.
Lending and Borrowing: Use eETH as collateral on lending platforms like Aave or Compound to borrow other assets or stablecoins. Alternatively, you can lend out your eETH to earn interest from borrowers.
Yield Farming: Participate in yield farming programs that reward users for staking their eETH in specific liquidity pools or other DeFi protocols. These programs often offer attractive yields, providing another avenue for maximising your returns.
Native Restaking: Deposit your eETH into ether.fi's native restaking protocol to earn additional rewards from services like EigenLayer. This innovative feature allows you to compound your staking rewards without the need for complex interactions with external protocols.
Earn Rewards: ether.fi rewards users in two ways:
ETH staking rewards: eETH automatically accrues ETH staking rewards, just like regular staked ETH. These rewards are generated by the Ethereum network for securing the blockchain through staking. The reward amount varies depending on factors like the total amount of ETH staked and network activity, providing a passive income stream for stakers.
ETHFI token rewards: On top of ETH staking rewards, you also earn ETHFI tokens as an added incentive for participating in the ether.fi ecosystem. These rewards can be boosted by providing liquidity to ETHFI pools on decentralized exchanges or participating in other DeFi activities.
Utilize eETH in DeFi: One of the key advantages of eETH is its liquidity. You can use your eETH in various DeFi applications, such as lending it out for interest, providing liquidity to earn trading fees, or using it as collateral for other financial activities. This flexibility allows you to maximise your returns and actively participate in the growing DeFi ecosystem.
By seamlessly integrating with existing DeFi infrastructure, ether.fi empowers you to earn staking rewards while retaining the liquidity and flexibility of your assets. This innovative approach to liquid staking opens up a world of possibilities for Ethereum holders to maximise their returns.
Why Trade ETHFI?
ETHFI's real-world applications extend beyond simple staking:
Yield Farming: By providing liquidity to ETHFI pools on decentralized exchanges, you can earn additional rewards in the form of trading fees and other incentives.
Lending and Borrowing: ETHFI can be used as collateral to borrow other cryptocurrencies, opening up new opportunities for leveraged trading and yield optimisation.
Governance Participation: Holding ETHFI allows you to vote on proposals and contribute to the decision-making process of the ether.fi DAO, shaping the future of the protocol.
Additionally, the platform simplifies the staking process by delegating validation to trusted node operators, making ETH staking accessible to a broader audience.
Let's delve into a couple of scenarios to illustrate ETHFI’s benefits:
Scenario 1: The Staking Enthusiast
Alice is a long-term Ethereum holder who believes in the future of crypto. She wants to stake her ETH to earn rewards but is hesitant to lock it up for an extended period. Alice discovers ether.fi and deposits her stETH, receiving eETH in return. She can now earn staking rewards while still having the flexibility to use her eETH in various DeFi applications.
Scenario 2: The DeFi Power User
Bob is an experienced DeFi user who constantly seeks new opportunities to maximise his yield. He notices the attractive yields offered in ETHFI liquidity pools and decides to provide liquidity with his eETH. In addition to staking rewards, Bob now earns trading fees from the pool, further boosting his overall returns.
ETHFI Tokenomics
Current Price: $5.30
Price in ETH: 0.001347 ETH
Market Capitalisation:
Total Market Cap: $5,300,000,000.00
Circulating Supply Market Cap: $610,114,517.00
24H Trading Volume: $364,760,414.00
The ETHFI token distribution is carefully structured to balance the interests of various stakeholders:
Team and Advisors: A portion of the tokens (23.26%) is allocated to the ether.fi team and advisors, rewarding their contributions to the project's development.
Investors and Advisors: Early investors and advisors receive a share of the tokens (32.5%), reflecting their support for the project's vision.
Protocol Guild: 1% of the tokens are allocated to the Protocol Guild, which is responsible for managing the protocol's treasury and ecosystem development.
DAO Treasury: 27.24% of the tokens are reserved for the DAO Treasury, which funds community initiatives and governance proposals.
Liquidity: 3% of the tokens are allocated to liquidity providers, incentivising them to create a deep and liquid market for ETHFI.
The remaining 33% of tokens were distributed through various mechanisms, including a Binance Launchpool, an Airdrop, and IEOs.
ETHFI operates on a deflationary token model, meaning that the token supply gradually decreases over time. This is achieved through mechanisms such as token burning and buybacks, which can help to maintain or even increase the token's value.
How to Trade ETHFI on Flipster?
Sign up for an account on the Flipster website or by downloading the Flipster app (Android or Apple).
Click the [Trade] tab.
Search for ETHFI and click on it.
Select the leverage (up to 100x).
Select either a Trigger Order or Market Order.
Input the amount of crypto you wish to trade, or select a percentage of your available funds to use.
Once you have confirmed the details, click the [Long] or [Short] button to open a position.
ETHFI Perpetual Swap Contract Specifications
Disclaimer: This material is for information purposes only and does not constitute financial advice. Flipster makes no recommendations or guarantees in respect of any digital asset, product, or service. Trading digital assets and digital asset derivatives comes with significant risk of loss due to its high price volatility, and is not suitable for all investors.