Originally published on: December 16, 2024
Ether.fi, a leading decentralized finance (DeFi) platform, is shaking up the industry with a new proposal to reward its ETHFI stakers. The plan involves using a portion of the protocol’s revenues to buy back native ETHFI tokens and distribute them to loyal stakers. This innovative move aims to boost the utility of ETHFI, strengthen its market value, and ensure that user incentives are aligned with the growth of the Ether.fi ecosystem.
According to Ether.fi’s team, the proposal suggests allocating 5% of protocol revenue for buying ETHFI tokens and rewarding stakers. This initial allocation is just the beginning, with more rewards planned for long-term token holders who have staked ETHFI for at least one month. The final decision on this proposal will be made by the end of the week through a tokenholder vote.
Ether.fi is no stranger to using protocol revenues for token buybacks, as it already does so from ETHFI’s primary liquidity pool. With fees and revenues adding up to nearly $60 million since its launch, Ether.fi has become one of the top players in the DeFi space. The platform’s total value locked (TVL) is nearing $10 billion, making it the fourth most popular DeFi protocol, as reported by DefiLlama.
Restaking, a key feature of Ether.fi, allows users to stake their tokens as collateral with a validator and earn rewards. Liquid restaking tokens (LRTs) offer a tradable claim on a pool of restaked assets, making it a popular choice among DeFi enthusiasts. The overall TVL for the top 5 LRTs currently stands at around $12.5 billion, showcasing the growing popularity of restaking and LRT protocols.
In a rapidly evolving DeFi landscape, projects like Ether.fi are under pressure to share protocol revenues with tokenholders. With competitors like Renzo and Kelp in the LRT space, Ether.fi is stepping up its game to ensure that its stakeholders are rewarded for their loyalty. This move aligns with the industry trend of value-accrual mechanisms, with projects like Ethena, Sky (formerly Maker), and Aave already implementing similar strategies.
As DeFi continues to flourish and attract more users, innovative approaches like the one proposed by Ether.fi are driving the industry forward. With a focus on rewarding stakeholders and enhancing user incentives, Ether.fi is setting a new standard for DeFi protocols. Stay tuned to see how this proposal unfolds and how it impacts the future of decentralized finance.