eETH

The liquid restaking token issued by Ether.fi when users deposit ETH into the protocol, representing natively restaked Ethereum that simultaneously earns base Ethereum staking rewards and additional yield from Actively Validated Services on EigenLayer. Unlike conventional liquid restaking tokens that deposit user ETH into EigenLayer's smart contracts through a delegated strategy, Ether.fi operates validators natively, meaning deposited ETH is staked directly on the Ethereum Beacon Chain with Ether.fi-managed or user-controlled validator keys. eETH is a rebasing token, meaning its balance in a holder's wallet increases over time to reflect accrued rewards rather than appreciating in ETH price. A non-rebasing wrapped version, weETH, exists for use in DeFi protocols that cannot handle rebasing mechanics, and weETH appreciates in ETH terms instead of rebasing balances. Both versions are widely integrated across DeFi lending markets, decentralized exchanges, and yield aggregators. Example: During the EigenLayer points incentive season of 2024, eETH and weETH became among the most widely used DeFi collateral assets, with weETH accepted in lending protocols including Aave and Morpho Blue and integrated into Pendle Finance for yield decomposition. Ether.fi grew to become the largest liquid restaking protocol by TVL, exceeding $6 billion at its 2024 peak. Why it matters for Web3: eETH represents the most widely adopted form of liquid restaking and demonstrated that users were willing to take on restaking smart contract risk in exchange for incremental yield over standard liquid staking. The scale of eETH adoption also concentrated a significant share of restaked ETH under Ether.fi's validator management, raising questions about validator diversity and centralization within the restaking ecosystem.

Category: mining staking

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