Ether.fi Explained

What is Ether.fi?

Ether.fi is a decentralized, non-custodial delegated staking protocol with a Liquid Staking Token (eETH). It uniquely allows stakers to retain control of their keys, enhancing security and autonomy. The protocol also enables the creation of a node services marketplace where both stakers and node operators can enroll nodes to provide infrastructure services.

The protocol operates through three phases: delegated staking, liquidity pool, and node services. In the delegated staking phase, stakers deposit multiples of 32 ETH, triggering an auction mechanism that assigns a node operator to run the validator node. The liquidity pool phase allows stakers with less than 32 ETH to mint eETH, offering an accessible staking option.

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Ether.fi Products

Ether.fi offers a range of products designed to facilitate decentralized, non-custodial staking and node operation on the Ethereum network. Below is a breakdown of its main services and use cases:

• Delegated Staking: Allows stakers to deposit multiples of 32 ETH, initiating an auction for node operators to manage validator nodes.
• Liquidity Pool: Enables stakers with less than 32 ETH to participate by minting eETH, providing a flexible entry point into staking.
• eETH and weETH Tokens: Liquid Staking Tokens that represent staked ETH, allowing for liquidity and participation in DeFi ecosystems.
• Node Services Marketplace: Facilitates the enrollment of nodes to provide infrastructure services, supported by programmable NFTs (T-NFTs and B-NFTs) representing staked ETH.
• Solo Staker Program: Uses Distributed Validator Technology (DVT) to enable individuals to run nodes with lower capital requirements, promoting decentralization.
• Permissioned Node Operators: Trusted partners that manage validators for the protocol without the need for collateral, ensuring high performance and reliability.
• Loyalty Points System: Rewards stakers and node operators with points that contribute to governance and additional benefits within the Ether.fi ecosystem.
• Liquid DeFi Strategy Vault: A vault that provides automated DeFi strategies, offering yields, loyalty points, and EigenLayer points on staked assets.

These products collectively aim to enhance the accessibility, security, and decentralization of Ethereum staking and infrastructure services.

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What is eETH?

eETH is a Liquid Staking Token (LST) from ether.fi that represents staked ETH, allowing users to stake without locking up their assets. When users deposit ETH into ether.fi's liquidity pool, they receive eETH tokens, which can be traded or used in DeFi applications, maintaining liquidity while earning staking rewards.

Users can redeem eETH for ETH on a 1:1 basis if there's sufficient liquidity or trigger a validator exit if needed. eETH integrates with various DeFi platforms, maximizing earning potential. By keeping control of their keys, users benefit from ether.fi's secure, non-custodial staking approach.

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Ether.fi Cash Card

The Ether.fi Cash Card enables users to borrow against and spend their Ether.fi balance directly, integrating with the Ether.fi mobile app. Users earn Cash Points with every purchase, redeemable for exclusive perks and benefits. The card comes in four tiers:

• Pepe: Annual fee: 0.01 ETH, Interest rate: AAVE market + 5%, Cashback: 10 pts/dollar, 24/7 support.
• Wojak: Annual fee: 0.1 ETH, Interest rate: AAVE market + 3%, Cashback: 80 pts/dollar, 24/7 support.
• Chad: Annual fee: 1 ETH, Interest rate: AAVE market + 2%, Cashback: 100 pts/dollar, 24/7 support and concierge service, 1 free crypto conference pass per year.
• Whale: Annual fee: 10 ETH one-time fee, 1 ETH annually, Interest rate: AAVE market + 0%, Cashback: 150 pts/dollar, 24/7 support and concierge service, 3 free crypto conference passes per year, access to seed stage investment deals.

Pre-orders start in July 2024, with cards shipping in September 2024.

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Ether.fi Tokenomics

Ether.fi's tokenomics revolves around the ETHFI token, which empowers holders to shape the protocol's future through the DAO. Key decisions include treasury management, token utility, and ecosystem growth. The token distribution is as follows:

• Core Contributors: 23.26%, vested over 3 years.
• DAO Treasury: 27.24%, supporting ecosystem development and the Protocol Guild.
• User Airdrops: 11%, rewarding community contributions.
• Partnerships: 6%, fostering long-term ecosystem growth.
• Investors: 32.5%, vested over 2 years.

ETHFI holders gain voting rights on proposals, treasury decisions, and token utility, driving ongoing development and growth of ether.fi.

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Founding Team

Mike Silagadze is the co-founder and CEO of ether.fi, the most decentralized liquid staking protocol on Ethereum. He previously founded Top Hat, an education technology company that grew to 500 employees and millions of customers. Mike also leads Gadze Finance and is a venture partner at Ripple Ventures. He has a degree in Electrical Engineering from the University of Waterloo. 

The team also includes Rok Kopp, Chief Customer Officer; Rupert Klopper, Vice President of Engineering; Seongyun Ko, Director of Engineering; and Jozef Vogel, COO.

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Bottom Line

Ether.fi is a leading decentralized staking protocol on Ethereum, featuring eETH for liquid staking, a flexible liquidity pool, and a Cash Card for spending crypto assets. With over $5.75 billion in total value locked (1.82 million ETH), Ether.fi demonstrates its strong market position.

Founded by Mike Silagadze, Ether.fi empowers users to control their keys and participate in governance through the ETHFI token, transitioning the protocol into a DAO and fostering ongoing growth and community engagement.