What is Ether.fi? Overview of the leading Liquid Restaking project on Ethereum

Ether.fi is one of the most notable Liquid Restaking projects in the market with over $4 billion TVL. So what makes this project special? What are the notable features of Etherfi?

1. What is Ether.fi?

Ether.fi is a Liquid Restaking protocol on Ethereum, where users can deposit their ETH into the protocol to receive eETH. It is one of the first native liquid restaking tokens with various applications in DeFi.

2. Product

2.1 Liquid Restaking

As one of the pioneers in the Liquid Restaking space, on November 17, 2023, Ether.fi collaborated with Eigenlayer to launch its own Points farming program. By simply minting eETH and utilizing them in various DeFi activities, users automatically receive the following ‘rewards’:

• Profits from staked ETH
• Ether.fi Points — a quantity of points to exchange for Ether.fi tokens during the TGE token project
• Eigenlayer Points
• Profits from DeFi strategies

With notable technologies, Etherfi effortlessly dominates the Liquid Restaking segment. At the current moment, despite the project having launched its token, it still leads and attracts over $4.5 billion in Total Value Locked (TVL).

2.2 Application of eETH in Defi

Ether.fi has collaborated with numerous DeFi protocols to bring forth a plethora of applications for its holders. As of now, eETH remains one of the most versatile Liquid Restaking Tokens in terms of participation in DeFi. This opens up countless opportunities for profit enhancement.

• eETH has been integrated with protocols such as Maverick, Gravita, Balancer, Curve, Pendle…
• Etherfi has also expanded cross-chain and integrated its LRT into many protocols on prominent Layer 2 blockchains such as Base, Linea, Blast…

Moreover, the majority of users providing liquidity to these protocols with eETH can receive both Ether.fi Points and Eigenlayer Points — both projects have publicly announced upcoming second airdrop rounds.

2.3 Vault

With the integration of a multitude of leading DeFi protocols in the market, managing strategies with Etherfi to optimize profits is also a challenging task. To address this issue, Etherfi introduces Vault — an integrated money pool that automatically selects strategies and optimizes APY (Annual Percentage Yield) for holders of ETH, eETH, or even stablecoins.

Benefits of participating in Vault:

• Simply depositing funds into Liquid’s Vaults, users have the opportunity to earn up to 16% APY with ETH, weETH, or eETH.
• For Stablecoins, currently earning a 15% APY and supporting prominent stablecoins such as USDT, USDC, DAI, or USDe.
• In addition to earning passive income, users will also earn Etherfi points — a quantity of points to exchange for Etherfi tokens in the upcoming second airdrop.
• Furthermore, by providing Stablecoins, users will earn Eigenlayer points, Etherfi points, and Ethena Sats — a strategy to farm airdrops from all three projects (season 2).

Note that alongside the benefits of participating in Vault, consideration should be given to security risks despite the protocol being audited.

Vault’s achievements:

• Etherfi will collaborate with Nexeus Mutual — an insurance project aimed at insuring funds for those depositing into Vaults.
• At present, the Vault product has successfully attracted $600 million in Total Value Locked (TVL).

2.4 DVT

DVT is one of the notable technologies of Etherfi, with DVT users can fully launch an Ethereum Node through Etherfi with just 2 ETH (the original requirement from Ethereum is 32 ETH).

By implementing DVT, Etherfi will help the Ethereum ecosystem increase decentralization to minimize barriers regarding technological knowledge as well as the minimum amount of ETH required to become node validators.

2.5 Staking Frens

Staking Frens are undertaken by Etherfi and their partners. At present, Etherfi is partnering with Ethena and launching the Staking Frens program from May 20th to May 24th, as follows:

• Users deposit funds into the Market-neutral USD Vault to share a reward pool of 500,000 $ENA tokens.
• The valid period lasts for 4 days, and the total amount of $ENA will be allocated based on the total amount of funds deposited into the protocol during the 4-day period.
• The Staking Frens program is conducted in collaboration with Etherfi’s partners, including previous projects such as Ondo, Gearbox, Omni, and Polyherdra Network.

3. Introducing Ether.fan

3.1. What is Ether.fan?

Ether.fan is a program designed for members of Ether.fi, built upon eETH to help users increase additional rewards when staking.

3.2. Components of Ether.fan

An NFT fan consisting of three components: traits, flair, and membership tiers.

• Traits: Provide individuality through features such as eyes, hair, skin, etc.
• Flair: Reflects the amount of ETH the user stakes.
• Membership tier: The membership program is a system of rewards for user loyalty. The longer they participate, the higher their membership tier. Therefore, they can earn more staking rewards depending on the tier of the NFT.

You can see that NFTs with higher tiers receive larger APRs. So, how many points does each tier require? Here are the points required for each tier

3.3 Utility of NFT

• Utilize as a PFP NFT across social media platforms.
• Serve as an exclusive access ticket to events at major Ethereum conferences.
• Participate in governance at Ether.fi — can propose or vote on proposals based on stake ratio.
• Upon upgrading membership over time, from Bronze to Diamond to unlock additional staking rewards.

3.4. How to join Ether.fan?

Users can stake ETH and mint NFTs with Ether.fan. By staking ETH through Ether.fan, users earn staking rewards and also contribute to making Ethereum more decentralized.

All ETH staked through Ether.fan is allocated to solo node operators through Ether.fi’s Operation Solo Saker, ensuring diversity in the node network and supporting a more decentralized Ethereum ecosystem.

Users can upgrade their NFT by sending additional ETH. Additionally, they can withdraw ETH at any time, but this action will result in at least a one-tier downgrade. If they wish to withdraw more than 50% of the ETH previously contained in the fan NFT, they need to burn the NFT to receive back all the ETH.

3.5. NFT lending

The project is collaborating with Arcade to bring NFTs to the NFT lending market. Anyone participating in Ether.fan will be able to receive additional liquidity from lenders on Arcade.

Lenders tend to favor this product because it offers two things that traditional NFTs do not have: floor value and predictable profits.

Above is not all the information about this trend, Wanna know more about how it works and why should you use it? Read at Theblock101.com!

Disclaimer: This article is for informational purposes only, not financial advice. Join the Bigcoinchat chat group to update the latest information about the market.