$ETHFI utility
$ETHFI token holders will be able to propose and approve:
- Major protocol upgrades
- Changes to key economic parameters, such as fees designated to the protocol
- Software development contributor permissions
- Whitelisting of node operators that run ETH nodes on behalf of the protocol
- Where and how ETH is restaked within the Actively Validated Services (AVS) ecosystem which utilizes the EigenLayer protocol
- Treasury Diversification activities
How Ethereum staking works
Staking offers crypto holders a way to earn passive income by locking up digital assets with a blockchain platform to help run it and maintain its security. It is made possible through the proof-of-stake (PoS) consensus mechanism which is a method used by certain blockchains, including Ethereum to select honest participants and verify new additional data blocks.
Node operators will be required to stake $ETHFI as “skin in the game” in order to ensure the nodes operate with minimal slashing risk. Once a node operator is approved by the community, they will deposit a specific amount of $ETHFI per node before receiving delegated validator keys. This stake needs to be maintained in order to continue operating the node. Rewards are derived from consensus rewards, transaction fees and maximum extractable value (MEV).
Liquid versus non-liquid staking
Liquid staking allows users to access their tokens while they are staked. It allows stakers to delegate their Ether to node operators and receive a tokenized representation redeemable for the tokens staked. This new token can also be traded or used as collateral in DeFi protocols, thereby unlocking the liquidity of the staked assets. Traditional staking, on the other hand, requires users to lock up their tokens for a certain period of time to become validators on the network and earn rewards.
Liquid staking tokens (LST)
An LST is a utility token issued upon securing a PoS blockchain by depositing native cryptocurrency in a dedicated protocol. There are three main LST types:
- Rebase tokens: tokens that automatically adjust their balance in response to deposits. For example, eETH is a rebasing ERC-20 token that is a 1:1 representation of ETH. Rather than the price of eETH appreciating against ETH as staking rewards accrue, a user’s balance of eETH rebase daily to reflect the earning of rewards.
- Reward-bearing tokens: tokens that increase in value over time, with the value and rewards determined by the changing exchange rate between the token and the staked asset.
- Wrapped tokens: certain LST, such as eETH are available in a wrapped version, weETH and after wrapping, these tokens no longer experience automatic balance adjustments and become reward-bearing tokens. Changes in the balances of wrapped tokens are achieved through minting, burning, or transferring.
Liquid staking risks
While liquid staking aims to mitigate risks, there are no guarantees that assets will remain completely secure. Risks include:
- Exposure to risks in broader DeFi markets – such as from vulnerabilities or bugs in such smart contracts, or attacks on the underlying PoS network.
- Market volatility which can create negative impact to LST value – not only are LST prices not pegged to underlying assets, but also their trading volumes are typically lower than that of the underlying assets.
- Slashing due to validators who do not live up to the expected values – loss of assets can trickle down to users with staked assets.
ether.fi benefits
With ether.fi, the staker controls their keys and retains custody of their ETH which reduces risk, while delegating staking to a node operator. The ether.fi mechanism also mints an NFT for every validator that is launched via the protocol. weETH is minted from a liquidity pool that contains these NFTs. These NFTs control the ETH staked and store metadata related to the validator. These NFTs can be used to create a programmable layer on top of staking infrastructure.
ether.fi also collaborates with EigenLayer, a native restaking solution that borrow’s Ethereum’s security offerings to validate new applications on the networks and allows stakers to earn additional rewards on ETH.
ether.fi staking rewards
Except for solo stakers, the staking minimum is .001 ETH which mints the equivalent amount of eETH. On top of an annual percentage rate (APR) and potential restaking rewards from EigenLayer, for each 0.001 ETH staked via ether.fi, a user earns one ether.fi “Loyalty Point” per day. The ether.fi whitepaper states, “Loyalty Points will play a role in decentralized governance.”
FAQs
$ETHFI (ETHFI) is the governance token that drives the ether.fi network, a decentralized, non-custodial delegated staking protocol. $ETHFI will enable community members to manage critical aspects of the protocol and direct the growth strategy of weETH.
What is the ethfi governance token? ›
ETHFI Token: The ETHFI token is used for governance purposes, allowing token holders to participate in decision-making processes and guide the protocol's development. It is also used to incentivize behaviors that contribute to the growth and security of the platform.
How much is a ethfi coin worth in dollars? ›
The current value of 1 ETHFI is $1.32 USD.
Is ethfi a good investment? ›
With its strong fundamentals and position within the rapidly growing DeFi sector, ETHFI represents a promising buy opportunity for investors looking to capitalize on the future of decentralized finance. Disclaimer Trading and investing in cryptocurrencies involve significant risk and can result in substantial losses.
What is an EtherFi token? ›
About ether.fi Staked ETH
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.
Are governance tokens worth buying? ›
Typically, governance tokens do not offer any revenue sharing (due to security laws), and they don't work particularly well as a community-oriented decision-making framework (holding tends to be concentrated, and there's apathy in participation or DAOs are generally dysfunctional) — rendering them as useful as ...
Will ethfi go up? ›
Based on your price prediction input for ether.fi, the value of ETHFI is projected to increase by 5%, potentially reaching $ 1.400896 in the next 30 days.
What was the price of ETHFI when launched? ›
ETHFI launched and started trading at $4.73.
How much will 1 Ethereum be worth in 2030? ›
Ethereum (ETH) Price Prediction Table
Year | Average Price* | Percent Increase |
---|
2027 | $7,749.17 | 40.00% |
2028 | $11,520.33 | 57.14% |
2029 | $17,279.38 | 54.55% |
2030 | $25,620.54 | 47.06% |
8 more rows
How high can ethfi go? ›
ETH Price Prediction 2030
The highest price point that Ethereum (ETH) can reach on or before 2030 is the area $10,000 to $12,000. An absolute market top might be set when this happens. Arguably, it will happen in the period 2027-2029. ETH may briefly touch a price point in or above this range.
Security. Ether.fi prioritizes security by enabling users to retain control over their private keys. The protocol operates on the Ethereum blockchain, utilizing its security features and decentralized nature.
What can I do with ethfi? ›
$ETHFI token holders will be able to propose and approve:
- Major protocol upgrades.
- Changes to key economic parameters, such as fees designated to the protocol.
- Software development contributor permissions.
- Whitelisting of node operators that run ETH nodes on behalf of the protocol.
What is the price of ethfi coin in dollars? ›
Price of ETHFI today
The live price of ether.fi is $ 1.326187 per (ETHFI / USD) with a current market cap of $ 232.01M USD. 24-hour trading volume is $ 40.51M USD. ETHFI to USD price is updated in real-time. ether.fi is +1.84% in the last 24 hours with a circulating supply of 174.95M.
What is the startup supply of the ethfi token? ›
ether.fi (ETHFI)
Token Name | ETHFI |
---|
Initial Circ. Supply When Listed on Binance | 115,200,000 (11.52% of total supply) |
Total and Maximum Token Supply | 1,000,000,000 |
Binance Launchpool Allocation | 20,000,000 (2% of total supply) |
Binance Launchpool Start Date | March 14, 2024 |
1 more rowMar 13, 2024
When did ether.fi launch? ›
Ether.fi was launched in March 2024, and its governance token, ETHFI, was introduced at the same time. The protocol has seen significant growth, with its Total Value Locked (TVL) increasing by over 3,600% since early 2024, reaching almost $4 billion.
What does a governance token mean? ›
Governance tokens are a type of cryptocurrency that allows holders to participate in the decision-making process of a blockchain project. These tokens are typically used in decentralized finance (DeFi) projects and decentralized autonomous organizations (DAOs).
What is the governance token of Ethereum name service? ›
What is ENS token? ENS is an ERC-20 token that offers holders the right to governance participation through the ENS Decentralized Autonomous Organization (DAO). The ENS DAO follows principles set out by its constitution, a set of binding rules that determine what governance actions are legitimate for the DAO to take.
What are the benefits for holding saddle's governance token? ›
Governance tokens are built to represent ownership and decision-making power within a decentralized system. They enable holders to influence the protocol's direction and decisions. Token holders can vote on multiple aspects such as feature development, budget allocation, integrations, and partnerships.
How do governance tokens gain value? ›
Why do governance tokens have value? Many governance tokens have a limited supply. This fact makes them more valuable to existing and new users who want to have more influence in the governance process of a particular blockchain project.