ether.fi launches their Liquid Staking Token

Since raising their seed round in March 2023 the major product launch that ether.fi has been working towards is their Liquid Staking Token (LST) eETH. The protocol has attracted over 17k ETH prior to launching their LST, but have announced that they have shipped eETH on mainnet.

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. They believe decentralized, non-custodial staking is an essential and foundational good for Ethereum and that there is need for a variety of staking solutions that serve many types of users and purposes. With ether.fi the staker controls their keys and retains custody of their ETH while delegating staking to a node operator. This significantly reduces their risk surface area.

What is eETH?

eETH is the first native liquid restaking token on Ethereum. Stakers can mint eETH on ether.fi. When a user does this, ether.fi will then stake and restake the ETH, allowing users to maximize rewards. By minting eETH you are getting exposure to 4 types of rewards: 1) Ethereum staking rewards 2) ether.fi Loyalty Points 3) restaking rewards (including EigenLayer points) 4) ability to LP into Defi protocols.

Why eETH?

First and foremost, ether.fi stakers keep control of their keys. Not your keys, not your coins. Additionally, eETH helps support Ethereum decentralization, early stakers will earn ether.fi Loyalty Points, eETH holders earn boosted staking rewards once restaking services are live, and eETH holders maintain composability in DeFi.

This type of exposure to rewards is currently unavailable to any other Liquid Staking Token on the market. Users will have a dashboard that gives them real time updates of their balances for rewards and points.

As part of their launch ether.fi is planning to focus on integrations with DeFi protocols to ensure that eETH has utility from day one. Partnerships that include Balancer, Aura, Curve, Gravita, Maverick, Pendle and others (some conditional on governance votes.) These partnerships will allow users to trade eETH and to use it as collateral, among other things.

Restaking and Decentralization

ether.fi has a core principle to focus on decentralization as a primary objective. This is a main reason they are going all-in on restaking. They acknowledge there are a lot of risks and unknowns but believe that restaking is a mechanism that can sustain the decentralization of Ethereum. The way this happens is by applying market forces and putting a price premium on decentralization in staking. Projects like EigenLayer, Restaking Cloud, and others are currently working on restaking and ether.fi plans to work with all of them.

Another show of their commitment to decentralization is the way they built their protocol, in a maximally non-custodial way, so that stakers stay safe. One of the things they did in support of this goal is Operation Solo Staker to help decentralize Ethereum nodes and to lower the barrier to entry for solo node operators. They have spent a ton of time and money helping drive this initiative, including pioneering the use of DVT on mainnet Ethereum. They also recently made a self-limiting commitment, and plan to embed it into the smart contracts so that it can’t be removed - not even with a governance vote.