Ether.fi $ETHFI research by EXCAVO

26. Juni

EtherFi is a decentralized trustless betting delegation protocol with a Liquid Staking Derivative token. It allows participants to retain control over their keys when delegating bets. Deposits in EtherFi are initially recalculated using Eigenlayer. Eigenlayer repurposes ETH staking to support external systems (e.g., rollovers, oracles) with an economic level of security, increasing returns for ETH stakers in the process.



The EtherFi protocol aims to decentralize the Ethereum validator scene by increasing the availability of ETH staking while maintaining a custody-free approach. By owning eETH or weETH, holders earn both EigenLayer and EtherFi loyalty points in addition to the underlying ETH staking yield, as well as the restaking yield from EigenLayer.
The ETHFI token is the native utility and management token for the EtherFi protocol. It is used by the community to manage key aspects of the protocol, including key metrics, token sales and economics, and community management.

Roadmap

The EtherFi project has a detailed roadmap outlining its development and expansion plans. Here are some key milestones and phases from the information provided:

Delegated Stacking.
Release of the EtherFi platform for desktops.
The ability to delegate via an auction mechanism.
Ability to withdraw bid rewards and unallocated ETH.
Introduction of transferable (T-NFT) and bondable (B-NFT) EtherFi NFTs.
Creation of an EtherFi protocol treasury contract.

Liquidity Pool.
This step involves creating a liquidity pool for EtherFi.

Decentralization and self-limitation.
Focus on decentralizing and self-limiting the protocol to less than 25% of the consensus level to avoid a single point of failure.

Other milestones
EtherFi aims to launch a real spending account that allows users to spend and borrow against their EtherFi balance in the real world. This includes an MPC wallet and credit card mobile app.
EtherFi has also put its set of smart contracts publicly available.

Token launch
The ETHFI token was launched in March 2024, with the token listed on the Binance exchange as of March 18, 2024.

Partnerships and integrations.
EtherFi is partnering with a wide range of DeFi protocols to increase the utility of eETH, its liquid token of restacking.
It is partnering with EigenLayer, a pioneering restacking protocol, to access the powerful restacking collective built into the Ethereum network.

This roadmap underscores EtherFi's commitment to decentralization, user control over assets, and expanding its ecosystem through strategic partnerships and technological advances.

Team



Mike Silagadze - Founder and CEO: Mike is an experienced entrepreneur and innovator in the technology industry. He is the founder of EtherFi, a project that aims to decentralize the Ethereum validator scene and increase the availability of ETH betting. His role as CEO is to oversee the strategic direction of the company and ensure the successful implementation of the EtherFi protocol.
Jozef Vogel - COO: Jozef is responsible for managing the day-to-day operations of EtherFi. His role as COO is to ensure the smooth running of the company, effectively manage resources and drive the growth and efficiency of the organization.
Rok Kopp - Co-Founder and Chief Growth Officer: Rok is another key member of the EtherFi team. As Chief Growth Officer, his primary responsibility is to ensure the growth of the EtherFi protocol. This includes developing and implementing strategies to increase the number of users, expand the ecosystem, and develop partnerships with other DeFi protocols.
These team members, as well as other EtherFi team members, work together to achieve the project goals of decentralization, availability, and user control over assets. Their combined expertise in technology, operations, and growth are essential to the success of the EtherFi project.

Audit

EtherFi has been audited by Cyberscope. The audit report can be found on the Cyberscope website. The audit report provides a comprehensive analysis of EtherFi smart contracts, evaluating their security and functionality.
The audit report includes a summary of the audit findings, highlighting any vulnerabilities or issues identified during the audit. It also provides a detailed description of the audit process, including the scope of the audit, the methodology used, and the tools and techniques used. The report evaluates EtherFi smart contracts against various security criteria such as code quality, compliance with best practices and industry standards. It also provides recommendations for improving the security and reliability of EtherFi smart contracts.



Overall, Cyberscope's audit report serves as an independent third-party assessment of EtherFi smart contracts, providing transparency and assurance to EtherFi users and stakeholders.



In addition, ETHFI has been audited by a number of renowned auditing companies such as certik, omniscia, nethermind, solidfied and hats finance. This indicates the high security of the project and the elimination of a large number of deficiencies, which will lead to the sustainability and reliability of the project.

GitHub

There has been significant developer activity related to Ethereum and projects such as EtherFi (ETHFI). The EtherFi protocol is actively supported by developers, as evidenced by the number of commits and repositories related to the project.



There are several EtherFi-related repositories on GitHub, including:

jtfirek/wormhole-ethfi.
This repository is dedicated to deploying cross-chain ethfi over NTT with a focus on Foundry, an Ethereum application development toolkit written in Rust.

etherfi-protocol
This repository contains various components related to the EtherFi protocol, including smart contracts, operator CLI, and design assets.

ethfi-wormhole
This is a fork of the `wormhole-foundation/example-wormhole-axelar-wsteth` repository, indicating that EtherFi is actively exploring cross-chain solutions.
The active development of the EtherFi protocol is emphasized by the number of commits, stars, and forks on GitHub, indicating a healthy and active community of developers contributing to the project.
Furthermore, the EtherFi token (ETHFI) was mentioned in the context of a token sale with details of its placement and distribution. This indicates that the EtherFi project is actively interacting with the Ethereum ecosystem and attracting the interest of both investors and developers.

Tokenomics



Ether.fi's tokenization is designed to ensure sustainability and community engagement. The total supply of EETHFI tokens is set at 1 billion, with an initial circulating supply of 115.2 million tokens (11.52% of the total supply). The token distribution includes:

32.5% for investors and advisors
23.26% for the team
27.24% for the DAO treasury
11.00% for airdrops
3.00% for liquidity
2.00% for Binance Launchpool
1.00% for the Protocol Guild

The EETHFI token plays a key role in the governance of the protocol, allowing the community to make decisions on critical aspects including management of Ether.fi's treasury, protocol modernization, and distribution of protocol fees. In the future, Ether.fi plans to introduce node services to further decentralize the Ethereum network and increase the utility of the protocol. The effectiveness of Ether.fi's liquidity solutions and future node services will be a critical factor in Ether.fi's ability to sustain growth and user engagement.

TVL

Ether.fi's TVL growth is attributed to several factors, including its innovative approach to liquid staking, which allows users to retain control of their keys by delegating staking to node operators and receiving rewards. The protocol also offers a Liquid Staking Token (LST) called eETH, which provides the ability to earn four types of rewards: Ethereum Staking Rewards, ether.fi loyalty points, rewards for restacking (including EigenLayer points), and the ability to provide liquidity to DeFi protocols.



Ether.fi's TVL growth is also a testament to the growing demand for liquid steaking solutions in the DeFi ecosystem. Liquid steaking allows users to earn steaking rewards while maintaining liquidity, which is a significant advantage over traditional steaking methods. Overall, the growth of TVL Ether.fi is a positive sign for the protocol and the broader DeFi ecosystem, as it demonstrates the growing demand for decentralized and user-friendly steaking solutions.

The difference between Renzo and EthFi:

1. Launch and Funding: EtherFi was launched in early 2023 and had an initial funding of $3.2 million with a valuation of $25 million. Renzo, on the other hand, was launched in 2024 and has a higher valuation of $3.3 billion.

2- Platform features: EtherFi allows users to bet in ETH or various liquid tokens (LSTs) and receive eETH tokens at a 1:1 ratio. Renzo, on the other hand, supports both native and LST restaking, accepting major LSTs such as stETH, ETHx, and wBETH. Renzo also extends its restacking services to Ethereum Layer 2, offering users to reduce their gas costs.

3. Token distribution: EtherFi has a maximum supply of 1 billion ETHFI tokens, with 11.52% of the total supply in circulation at launch. Most of the tokens are distributed among the team, investors and advisors - 23.26%, 32.5% and 27.24% of the total, respectively. No information on the distribution of Renzo tokens is provided.

4. Services and partnerships: EtherFi has partnered with EigenLayer, which allows it to provide users with more diverse liquidity pools and enhance project security through EigenLayer technologies. Renzo, on the other hand, has partnered with Connext Network and has the support of Binance Labs.

5. Restaking process: Renzo simplifies the restaking process by allowing users to place bets in ETH, stETH or wBETH directly on its platform, which then manages the restaking on EigenLayer with optimized strategies. EtherFi, on the other hand, uses tokens that users have placed to participate in native restaking on the EigenLayer platform.

6. TVL and market position: EtherFi is the leading protocol in the sector with a TVL of $1.04 billion, accounting for 35% of liquid TVL restacking. Renzo's TVL is $270 million.

Thus, EtherFi focuses on providing a liquid restacking platform with diverse liquidity pools, while Renzo streamlines the restacking process and offers optimized strategies for users.

Blockchain


According to the information provided, developers now own a significant share of all coins, and Binance has started accumulating EthFi tokens on both hot and cold wallets. In the last month alone, Binance has acquired more than $110 million worth of tokens. The developers' wallet holds more than 87% of the tokens, indicating a high level of allocation, which could be a sign of asset price manipulation. In addition, Wintermute's presence as a market maker on the asset raises concerns about possible price manipulation through access to investment fund wallets.
These factors point to the possibility of manipulation of the asset's price, so developments should be monitored to ensure a fair and transparent market.



Conclusion

The project has attracted significant attention: its token is listed on the Binance exchange and has a TVL of over 6 billion. Etherfi offers node maintenance solutions to streamline the process and reduce costs associated with staking. The project has also partnered with EigenLayer, a powerful collective restacking engine built into the Ethereum network.
Etherfi's future prospects look promising as the project continues to gain momentum and attract new users. The EigenLayer integration and emphasis on decentralization and autonomy set Etherfi apart from other stacking protocols. However, as with any project in the rapidly evolving crypto space, there are risks and uncertainties that need to be carefully considered. Overall, Etherfi appears to be a promising project focused on innovation and decentralization. The project's ability to raise significant TVL and the partnership with EigenLayer are positive indicators for its future prospects.
There are systemic risks that all participants in the ecosystem accept. The approval of the ETH ETF will have a positive impact on the entire ether ecosystem and this project in particular, as for the chart we see a strong local level holding, on the breakdown of which I want to take a small part in the portfolio.