TVL exceeded $4 billion, and Liquidity stake leader ether.fi again

In 2024, with the upgrade of Ethereum Dencun, the Decentralized Finance track will also be renewed. In the Ethereum stake ecosystem, represented by Liquidity re-stake, innovative projects are constantly emerging, bringing new opportunities to the ecosystem and users.

Among them ether.fi as a leader in Liquidity re-stake, it has attracted global attention through its unique non-custodial and Decentralization stake solutions that not only enhance the security of the network, but also provide users with an efficient way to encryption assets rise.

At the same time, its rising TVL shows the enthusiasm of users for the project - according to DefiLlama data, as of April 2024, the ether.fi TVL is about $4 billion, accounting for half of the Liquidity stake market (the total TVL of the overall track is $10 billion).

In order to better understand the ether.fi, this paper will summarize and analyze its technology implementation, market performance, ecosystem development and future planning from long aspects, so as to depict its innovations and challenges in the process of promoting Decentralized Finance innovation, and provide some reference materials for the majority of participants in the Liquidity re-stake track.

Project Introduction

ether.fi plays a key role in the DeFi (Decentralized Finance) sector, especially in the Ethereum stake and Liquidity re stake markets.

As the leading non-custodial stake solution, ether.fi provides users with services and features that give them full control over their encryption assets and the ability to monetize their stake. At the same time, ether.fi is able to maintain Liquidity while keeping encryption assets safe. In the underlying technology, ether.fi introduces advanced technologies such as Distributed Validator Technology (DVT), which greatly enhances the security and Decentralization of the Ethereum network, while also providing transparent monitoring of validator behavior.

Based on powerful technology and innovative solutions, ether.fi wants to be the benchmark for Decentralized Finance services, leading the next 100 million users to participate in the encryption world, and is committed to driving the development of Decentralized Finance in a more secure, transparent, and low-barrier manner. For example, while maintaining full control over the user's funds, it provides a simple, intuitive operation interface and comprehensive educational resources.

In terms of governance, ether.fi encryption has adopted the world's most democratic and fair organizational model, the DAO (DAO), which ensures that all key decisions are voted on by community members by holding and using ETHFI Token. This model not only ensures transparency and fairness in the project, but also allows community members to directly participate in the development of the ether.fi and co-shape the future of the project.

Technical Architecture

Based on three core technologies, ether.fi can provide users with safe and reliable Decentralized Finance services while driving the development of security, transparency, and Decentralization across the industry.

Smart contracts

As with other financial products in Decentralized Finance, ether.fi uses smart contracts as its underlying logic. smart contracts controls all aspects of stake, re-stake, reward distribution, and Node operations, and is at the heart of the ether.fi protocol and key to ensuring transparency, security, and non-custodial across all transactions. To ensure the security of the smart contracts, ether.fi conducted long rounds of rigorous security audits, including code reviews and stress tests conducted by well-known third-party security firms Certik and OpenZeppelin.

Secret key management technology

In ether.fi, Secret Key management is a key technology to ensure the security of user assets. To enable users to have complete control over their assets, ether.fi uses advanced encryption technologies such as ECIES to encryption the user's authenticator Secret Key and set rules that only designated Node operators can decrypt and use these Secret Key to launch authenticators. With this set of encryption and Secret Key protections, each stake ether.fi has full control over the keys to their stake assets.

Decentralization validators Technology (DVT)

Decentralization validators Technology (DVT) is one of the major innovations in the ether.fi technology architecture. DVT allows longest independent validators to jointly manage a single Node, spreading risk and increasing the network's resilience to attacks. In ether.fi's DVT model, the validators Secret Key is play people for suckers into long parts that are distributed to different Node carriers, and the authentication Node can only be operated if long or all carriers work together.

DVT not only enhances the security of the system, but also enhances the Decentralization of the Ethereum network by providing a more fair and transparent verification process. In this way, the dependence of the entire network on a single validators is ether.fi drop, making the network more robust and reliable.

Product features

ether.fi protocol designed a range of innovative services to support and extend the Ethereum stake ecosystem, including delegated stake, liquidity pool and re-stake, and Node services, each of which can long wick candle provide a solution to a specific need.

Delegated staking

ether.fi's delegated stake feature is based on a Decentralization and non-custodial mechanism that allows users to participate in the verification process of the Ethereum network. In this process, when a user stakes 32 ETH, two NFTs are generated: T-NFT and B-NFT. T-NFT represents transferable ownership of 30 ETH, while B-NFT represents the remaining 2 ETH and gives holders additional responsibilities and risks, such as monitoring the performance of validators. Based on the application of such NFT, ether.fi not only provides Liquidity of stake assets, but also enhances the security and transparency of the entire stake process.

Liquidity pools and re-staking

As a Liquidity re stake leader, the core function of ether.fi must be Liquidity stake.

In ether.fi, users who participate in liquidity re-stake ether.fi stake less than 32 ETH and automatically receive the equivalent amount of eETH or weETH in protocol minting. These tokens can be freely traded, ensuring that users can quickly exchange back to ETH or other encryption assets when liquidity is needed. At the same time, the ETH stake liquidity pool is not stored statically, but is dynamically re-stake on other Decentralized Finance protocol or Ethereum verification Node to increase the efficiency of the use of funds and generate additional income, thereby increasing the total return of users who hold eETH and weETH.

Since eETH and weETH have the properties of ERC-20 tokens, in addition to holding them for liquidity pool yields, they can also be used in various Decentralized Finance platforms, such as lending, liquidity provision, or as a medium of exchange. Once again, these playways enhance the usefulness of the ether.fi Token and expand the scope and potential benefits for users in the Ethereum ecosystem.

Node service

ether.fi's Node services provide operators with a business model that leverages ether.fi infrastructure to provide services to stake and other network participants, including running validators, providing a secure and stable Node operating environment, and other value-added services such as performance monitoring and data analytics.

These services not only improve the stability and security of the Ethereum network, but also create new revenue channels for Node operators, driving the business potential and sustainable development of the entire ecosystem.

Economic model

According to ether.fi's external information, the total supply of ETHFI is 1,000,000,000, of which:

• 23.26% is allocated to core contributors, i.e., core team members who continue to develop Ether.fi protocol and build communities, and this part of the Token will be gradually unlocked over three years;
• 27.24% allocated to the DAO Treasury to support the development of ecosystems and fund projects and community activities related to ether.fi ecosystems;
• 11% is allocated to user Airdrops to reward users for engagement and loyalty, as well as to attract new users. The total airdrop volume in the first quarter was 68,000,000 and the actual claim volume was 46,596,978;
• 6% allocated to partners to ensure the long-term rise of the project;
• 32.5% is distributed to investors and aims to reward early investors and fund providers who support the development of the project, and this part of the token will be unlocked over two years.

At the same time, ether.fi gives ETHFI and its holders long applicable ways and rights:

• DAO governance. ETHFI Token holders can participate in the platform's governance decisions and vote on key protocol updates and changes;
• Incentives. ETHFI Token is an important part of the platform to reward users who participate in staking and running nodes, and encourage them to contribute to the security and stability of the network.
• Payment of fees. ETHFI Token can be used to pay for various protocol fees incurred when trading and operating on the ether.fi platform.

Ecological development

The expansion and influence of ether.fi ecosystem is due to its go-to-market strategy, community engagement, strategic partnerships, and real-time feedback from the market. Together, these elements make up ether.fi's competitiveness in the Liquidity stake track.

Market Strategy

From the very beginning of ether.fi's launch, it was clear that the team had established a clear market positioning and developed a series of promotional strategies to enhance its market visibility and appeal. Especially at the time of launch, whether it is to launch products when the market re-stakes is at its highest, or to attract users to participate in the form of points and Airdrops, it is a reflection of a successful market strategy.

According to Dune statistics, ETHFI Airdrop attracted 43,717 independent Wallet to participate in the application on the same day, and a total of 85,911 independent Wallet Address have completed the application by the end of April. And according to DeFilLama data, ether.fi's TVL has reached a staggering $3.138B due to Airdrop expectations.

Incentives

In addition to the TVL brought by Airdrop activities, ether.fi also planned other incentive activities to not only increase the enthusiasm and activity of community participation, but also attract more long participants from the outside. For example, the recent "Staking Frens" event held in ether.fi can not only earn the same amount of ETHFI, but also provide more long rewards, such as ZK, OMNI reward shares, ether.fi and EigenLayer Airdrop points, and so on.

The event managed to attract a large number of attendees, with ether.fi TVL reaching a maximum of $3.892B during the event, according to DeFilLama.

Strategic cooperation

Since its launch, ether.fi has been seeking strategic cooperation with other platforms, applications, and infrastructure. For example, in "Staking Frens", we continue to combine with other application combinations to provide more long incentives to attract users from different ecosystems to participate. For example, it recently announced a partnership with the SSV Network to enhance the security and decentralization of the network by integrating decentralized validator technology (DVT).

In addition, for the practical application of eETH and weETH, ether.fi is also expanding its cooperation with other well-known Decentralized Finance platforms, making it easier for ether.fi users to use their Liquidity stake Token on these platforms.

Market feedback

Overall, the current encryption market's attitudes and perceptions towards ether.fi are positive. The two most critical metrics are:

TVL。 As of the end of April, ether.fi successfully exceeded $4 billion, and although it has subsequently shrunk, it is still stable at more than 3.9 billion, accounting for only 40% of the market share of the Liquidity stake track.

ETHFI。 Affected by the overall market, the current price of ETHFI is around 3.8 USDT, which is higher than the issuance price and some encryption assets. ETHFI ranks 151 in market capitalization and has a market Circulating Supply of nearly $113M in the past 24 hours, both of which belong to the upstream level of the industry.

Therefore, despite the impact that changes in the market environment may have an impact on it, based on the current market acceptance and user feedback, ether.fi remains in a leader position to provide Liquidity re stake services.

Future developments

According to the roadmap released by ether.fi, its future development plan closely combines technological innovation and market demand, and is committed to promoting the continuous progress and rise of the Decentralized Finance ecosystem. Here are the key directions for ether.fi in the future:

• Technology iteration and optimization. According to the roadmap released, ether.fi will continue to deepen its Decentralization validators technology (DVT) to improve the security and scalability of the network. In addition, the planned upgrade includes improvements to the Secret Key management process to further secure user assets.
• Improve the governance model. ether.fi plans to gradually introduce a more comprehensive DAO governance structure in the future, allowing community members to be more directly involved in protocol decision-making. This measure will ensure transparency and fairness protocol while enhancing users' trust and participation in the platform.
• Expand the partner network. In order to strengthen its market position and expand its ecosystem, ether.fi will seek to establish partnerships with more long Decentralized Finance projects and TradFi institutions. These collaborations will help bring in new user groups and further enrich ether.fi's products and services through partner technologies and services.
• Enhance marketing activities. In light of increased competition in the market, ether.fi plans to increase marketing and user education activities on a global scale. By providing more long educational resources and engagement opportunities, it aims to attract more long users to the ether.fi platform while increasing the engagement and loyalty of existing users.
• Promote technology standardization. ether.fi is committed to promoting interoperability and standardization with other major Decentralized Finance protocol, and will continue to do so through leadership or participation in relevant industry organizations and standards development in the future.

Risk assessment

During the development of ether.fi, while the project demonstrated significant growth potential and innovation, it also faced a number of risks that could affect its operational efficiency and market performance. The following are the main risk factors for ether.fi projects:

• Smart contracts security risks. As a Blockchain-based Decentralized Finance project, ether.fi relies heavily on smart contracts technology. Although smart contracts have been heavily audited and tested longest, there is still a risk of being hacked or having unknown vulnerabilities. Such risks may lead to the loss of users' funds and affect the credibility of the platform.
• Secret key management risk. ether.fi provides non-custodial encryption asset management services, and users must manage their Secret Key on their own. This increases the risk of lost or stolen secret keys due to user error. While ether.fi has invested heavily in user education and Secret Key protection technologies, it has not been able to completely eliminate this risk.
• Regulatory risk. As the encryption industry comes under increasing focus from regulators around the world, there may be more regulations long affect the Decentralized Finance industry in the future. These regulatory measures may include, but are not limited to, restrictions on the movement of funds, changes in tax policies, or outright injunctions on encryption assets, which may negatively impact ether.fi's operations.
• Market risk. encryption market is extremely Fluctuation, and ether.fi's Token ETHFI and its associated financial products may experience significant price Fluctuation. This Fluctuation may be affected by macroeconomic factors, market sentiment and other external events, such as ETHFI pumping to 10 USDT in March and currently falling to 5 USDT.
• Technical failures or performance issues. ether.fi technology architecture, while advanced, like all technology systems, can experience unexpected technical failures or performance bottlenecks. Systemic technical issues can lead to service interruptions, affecting the user experience and the overall security of the system.

Summary

Today, liquid staking and re stake continue to be one of the mainstreams in the Decentralized Finance and encryption industry, and ether.fi has established itself in the Decentralized Finance space by providing innovative non-custodial Liquidity stake solutions. However, there are still longest challenges ahead. Whether ether.fi can continue to maintain its leader position and continue to demonstrate its strong innovation and technological capabilities, and finally achieve its vision, still needs to be tested by the market price and the market.