How Ether.fi Retained TVL as Restaking Lost Its Luster
A year ago, the concept of restaking was a dominant talking point in the crypto community, with projects like EigenLayer touted as the future of financial operations within the blockchain. Yet, as we reach mid-2025, the allure surrounding restaking has faded significantly. Total value locked (TVL) across the sector has dropped, and the popularity once associated with point farms has diminished.
Amid this changing landscape, Ether.fi has emerged as the market leader, proving resilient as it aids users in maximizing their yield through liquid staking tokens (LSTs), which can be deployed throughout the decentralized finance (DeFi) ecosystem. Ether.fi’s recent ambitions suggest a shift towards becoming a neobank for crypto users and companies.
Ether.fi’s Dominance
Established in the Cayman Islands, Ether.fi was one of the pioneering entrants in the liquid restaking arena. The project’s initial success was propelled by its innovative points farm, where early adopters earned points convertible into a prospective token airdrop. This strategy paid off: during a rapid growth phase at the beginning of 2024, staked ETH ballooned from 45,000 to 808,000. Currently, Ether.fi boasts 2.58 million staked ETH, dwarfing its nearest competitor, Renzo, which holds around 380,000 ETH.
In terms of dollar valuation, Ether.fi’s TVL stands at approximately $5 billion—a decline from December’s peak of $9.4 billion. However, this is correlated more with ETH’s falling price than with significant capital outflows. Furthermore, Ether.fi maintains a close relationship with its user base, an engagement strategy emphasized by CTO Silagadze, who notes that they are familiar with a considerable portion of their TVL.
In contrast, Renzo has faced challenges, with over 60% of its ETH withdrawn since last July, reducing its TVL from 1 million to just 378,000 ETH, as highlighted by data from DefiLlama.
From Restaking Protocol to Neobank
Silagadze articulates a broader vision for Ether.fi that extends beyond restaking. The platform aims to evolve into a neobank, akin to fintech innovators like Revolut. According to Silagadze, "Staking for us was really just a way of building TVL and getting a user base. The ultimate goal is to create an integrated product suite that allows users to fully off-ramp from their traditional banking institutions and operate on a crypto-native platform."
In line with these ambitions, Ether.fi recently introduced a "Cash" Visa card on the Scroll network, which Silagadze believes will become a significant revenue source. The term "neobank" has gained traction in the crypto ecosystem, with alternatives like Nexo rebranding as such and the recent stealth launch of Dakota. Notably, the blockchain firm EOS has also pivoted towards Web3 banking.
Ether.fi plans to consolidate its offerings into a user-friendly mobile application that encapsulates three core products: Ether.fi stake (a staking protocol), Ether.fi liquid (an AI-driven DeFi strategy manager designed to optimise yield), and the Ether.fi cash wallet and credit card.
Despite the overall regulatory uncertainty prohibiting many staking firms from effectively penetrating the U.S. market, Ether.fi remains optimistic. Silagadze expressed confidence that the crypto-friendly landscape under the Trump administration would facilitate their ability to offer services to American customers as they navigate the necessary licensing processes.
Ethereum’s Sentiment Problem
Ethereum was once the star of the crypto universe, riding high during the 2017 bull market and at the forefront of the DeFi and NFT surge from 2020-2022. Currently, however, the Ethereum network faces scrutiny regarding delays in its roadmap, juxtaposed against the rising popularity of alternative blockchains, particularly Solana, which has garnered attention for its speed and lower transaction costs.
At present, Ether trades around $1,965, having suffered a 40% depreciation over the past year, while Solana’s market value is approximately $131 with a comparatively modest 25% downturn. Silagadze attributes some of the detrimental sentiment toward Ethereum to competitive ecosystems actively disseminating misleading narratives. “Some of that negative sentiment is clearly engineered by competing ecosystems,” Silagadze stated, pointing to the strategies employed by Solana supporters to position their platform favorably.
As Ether.fi moves towards its ambitious vision of a crypto-focused neobank, the challenge remains to navigate user sentiment and market dynamics, carving a distinctive identity in the face of rising competition.
