Introduction
Decentralization doesn't matter ... Until it does.
Acknowledgments
Many delegated staking solutions have been built before ether.fi. We owe a debt of gratitude to everyone who has been building in the space. They've inspired and motivated us.
We believe decentralized, non-custodial staking is an essential and foundational good for Ethereum. There is a need for various solutions that serve many users and purposes.
We want to give particular shoutouts to the teams that built RocketPool, StakeWise, Diva and Lido. We are fans and have learned a lot from your work.
Principles
We take our ethics seriously and want the community to hold us accountable for living up to the following:
Decentralization is a primary objective. We will never compromise on the non-custodial and decentralized nature of the protocol. Stakers must maintain control of their ETH.
The ether.fi protocol is a real business with a sustainable revenue model. We’re in this for the long haul. We think and plan on the scale of decades. No ponzinomics f*ckery.
We will do the right thing for the Ethereum community, always. If and when we mess up, we will own it and course correct quickly.
Executive Summary
Ether.fi Protocol is a decentralized, non-custodial staking and restaking protocol designed to maximize user control and Ethereum network decentralization. The protocol issues liquid staking tokens: eETH
(rebasing) and weETH
(wrapped, non-rebasing), which allow users to earn rewards from both Ethereum consensus staking and native restaking on EigenLayer, without losing liquidity or DeFi composability.
High-Level Operational Summary
This section contains a high-level summary of ether.fi mechanisms. For a detailed description, please see the ether.fi section.
The ether.fi protocol allows ETH holders to delegate staking while retaining control of their assets. There are several users and stakeholders on ether.fi:
Depositors/Stakers: users who stake their
ETH
through the protocol. Depositors receiveeETH
shares representing their claim on the protocol’s pooled stake and rewards. They can also opt into Membership NFTs, which track their deposit shares and accrue loyalty and tier points for reward boosts.Node operators: entities approved by ether.fi to run validator nodes. They are legacy validators or form DVT clusters (via SSV network) that operate validators on behalf of depositors.
Restaking services: Actively Validated Services (AVSs) on EigenLayer that consume staked ETH security. The protocol restakes pooled ETH on EigenLayer, and rewards (and potential slashing) from restaking are socialized among depositors.
At a high level, depositors provide ETH
to the LiquidityPool, which creates new validators as needed. Node operators run those validators under a DVT setup. An on‑chain oracle periodically reports consensus and execution rewards; these rewards are rebased into the supply of eETH
and distributed to depositors according to their shares and membership tier.
Validator Management
Validator Creation
When a user mints eETH/weETH, the deposited
ETH
are sent into ether.fi, the LiquidityPool.In order to avoid front-running, we use partial deposit approach where we deposit 1 ETH per validator to Ethereum’s deposit contract.
Once the oracle confirms that the withdrawal credentials are correctly set, the pool tops up the remaining ETH needed to reach 32 ETH.
Validator Exit
When the amount of ETH in the liquidity pool crosses below a threshold, then ether.fi initiates exits of validators via EIP-7002.
Liquidity Pool and eETH
The LiquidityPool aggregates ETH
from depositors and stakes it through the validator creation process described above. In return, it mints eETH
, a rebasing token whose total supply grows when staking rewards accrue. Depositors can wrap eETH
into weETH
, a non‑rebasing ERC‑20 token better suited for DeFi integrations.
Deposits and redemptions are processed on demand:
Minting eETH: users send ETH to the LiquidityPool and receive
eETH
shares at the current exchange rate (total eETH supply divided by total pooled ETH).Redeeming eETH: users burn their
eETH
orweETH
to receive the underlyingETH
. If the liquidity pool’s unbondedETH
is insufficient to satisfy a redemption, the protocol initiates validator withdrawals in accordance with the queue of redemption requests.
Restaking
Ether.fi currently restakes staked ETH
on EigenLayer. The earned restaking rewards are distributed as KING via a separate claim process KING rewards distribution. Once ether.fi opts in with slashable EigenLayer AVSs, it may subject restaked ETH
to slashing if operators misbehave; ether.fi socializes both the rewards and the risks across all depositors.
Billing
Billing for node services is executed via a billing contract. Services tracking and attribution done via a centralized service run by ether.fi. This will change over time.
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