Originally published on: December 16, 2024
Ether.fi, a prominent decentralized finance (DeFi) protocol, is shaking up the staking game with an innovative proposal. They plan to use a portion of their protocol revenues to buy back their native ETHFI tokens and distribute them to stakers. This move aims to reward stakers, enhance the utility of ETHFI, strengthen its market value, and align user incentives with the growth of the Ether.fi ecosystem.
The proposed allocation of 5% of protocol revenue towards buying ETHFI and distributing it as rewards is a groundbreaking initiative. Ether.fi views this as a strategic starting point to kickstart the process. Initially, only tokenholders who have staked their ETHFI for a minimum of one month will be eligible for these rewards.
Tokenholders have the power to decide the fate of this proposal through a vote scheduled to conclude by the end of this week. Ether.fi is already utilizing protocol revenues to buy back tokens from ETHFI’s primary liquidity pool, showing a commitment to making this ecosystem flourish.
Ether.fi, known for its liquid restaking protocols, has secured its position as the fourth most popular DeFi protocol with close to $10 billion locked in total value. Restaking involves using tokens as collateral with a validator to earn rewards and secure other protocols simultaneously. The introduction of Liquid Restaking Tokens (LRTs) has revolutionized the DeFi landscape, offering tradable claims on restaked assets.
Since its inception in 2023, Ether.fi has amassed nearly $60 million in cumulative income from fees and revenue sources. The DeFi industry is currently experiencing a surge in TVL, approaching all-time highs, with the rising popularity of restaking and LRT protocols driving this growth.
In a move towards tokenholder empowerment, DeFi projects such as Ethena, Sky (formerly Maker), and Aave are exploring mechanisms to share protocol revenues with their tokenholders. This trend indicates a shift towards a more equitable distribution of value within the DeFi ecosystem.
Ether.fi’s proposal to allocate revenue for buybacks and rewards underscores their dedication to creating a thriving community of stakers and investors. Stay tuned for the outcome of the tokenholder vote and witness the evolution of DeFi with Ether.fi at the forefront of innovation.
Don’t miss out on the latest DeFi developments and financial opportunities. Subscribe to our Finance Redefined newsletter for exclusive insights delivered to your inbox every Friday. Join us on this exciting journey through the world of decentralized finance!