Overview
As Ethereum continues its evolution into a proof-of-stake (PoS) ecosystem, liquid staking has emerged as a key infrastructure layer. Among the many protocols in this space, EtherFi stands out as an innovator â combining non-custodial staking, restaking via EigenLayer, and user-centric incentives.
Key principles:
- Full user control of staking keys (non-custodial)
- Three progression phases: Delegated staking, liquidity pools, and validator-node services.
- Issuance of a liquid staking token called eETH, promising flexible capital deployment.
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How it works: user flow
- Stake ETH
- User connects wallet, selects amount of ETHïŒBTC or stablecoins to stake.
- EtherFi mints eETH/eBTC/eUSD and returns it to userâs wallet.
- ETH is allocated across decentralized validators (via SSV).
- Enable Restaking
- Users opt-in to restaking with EigenLayer.
- Assets are reused to secure AVSs for additional yield.
- User earns both staking rewards + EigenLayer points.
- Liquid
- Users can deposit assets into their vault (ETH, stablecoins, BTC).
- Vaults automate rewards and give visibility into earnings.
- It provides different strategy vaults which maximize yield through a combo fixed and variable yield positions across DeFi platform(e.g., Curve, Uniswap, Aave).
- Spend with Cash Card
- Spend via crypto debit card.
- Earn ETHFI rewards + cashback.
- Rewards are based on Vault balance and on-chain activity.
- Real-world Integration: users can us the cash card to book a hotel can earn rebates.
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Differentiation & Competitive Edge
Feature | EtherFi | Lido |
Staking Asset | ETH, BTC, Stablecoins (eETH, eBTC, eUSD) | ETH only (stETH) |
Restaking Support | Native EigenLayer integration (restaking-ready) | No official EigenLayer integration; focus remains on core staking |
Custody Model | Non-custodial (users keep key ownership) | Semi-custodial (validators manage keys) |
DeFi Compatibility | eETH usable across DeFi + real-world card usage | stETH widely supported in DeFi |
Real-World Utility | Cash card, travel rewards, cashback | â None |
Incentives | ETHFI token, points system, rewards club | Staking APR, no extra reward program |
Institutional Focus | Primarily retail users | Institutional-ready (via stVaults in Lido v3) |
Product Takeaways
For product managers and Web3 builders, EtherFi provides lessons in:
- Bundling yield mechanisms (staking + restaking) for maximum value
- Balancing decentralization with usability
- Gamifying early user adoption with point-based incentives
- Bridging DeFi and TradFi through spending utilities
Itâs a great case study of user-aligned innovation in the Ethereum staking vertical.
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