GM. This is Milk Road PRO, the newsletter that doubles as your portfolio’s very own cheerleader.
Last summer, crypto was all about one thing: restaking.
EigenLayer lit the spark, and the whole space went wild.
The pitch was irresistible:
- Take your staked $ETH.
- Use it to secure other networks or services.
- Earn more rewards. 🥳
More yield with no extra effort? Who would say no to that?
The hype was off the charts.
EigenLayer, plus a couple of smaller players, pulled in nearly 6 million $ETH.
That’s around 5% of all $ETH in existence.
No surprise, new projects like Ether.fi, Renzo, Swell, Mantle and many others jumped in fast.
And they didn’t just offer staking rewards. They layered on points for Eigen’s airdrop and points from their own programs. It was the golden age of points farming, and nobody wanted to miss out.
The result? Everyone was bullish, convinced restaking was the next big wave.
But hype only carries you so far.
👉 The hard truth is, there just aren’t enough real services willing to pay for that extra security that restaking offers. Without demand, the model starts to wobble.
And that’s where today’s story gets interesting.
What started as “just another restaking protocol” has now grown into something much bigger: a crypto neobank.
Ether.fi used the $ETH they pulled in during the restaking boom as fuel, then stacked on new features that fit perfectly with their new vision.
And PS: we can already tell they’re cooking up something pretty exciting.
The proof? Their revenues just hit all-time highs.
September brought in the highest revenue yet at $5.34M – the best month ever!.
Even better, they’re using some of that revenue for $ETHFI token buybacks — strengthening their bull case while riding all the hottest narratives:
- Building toward a crypto neobank super-app
- Strong growth fundamentals
- Token buybacks
That’s a powerful combo. And it’s exactly why we had to dig deeper to learn more about them:
- What exactly are they selling and is it really unique?
- Why would anyone choose them over the alternatives?
- Do they have a moat, or can competitors eat their lunch tomorrow?
- What’s in it for early users — any juicy incentives?
- Is their tokenomics set up to actually reward investors, or just dilute them?
- What’s this project really worth?
We want to dig in and learn everything we can to shape our own thesis on Ether.fi.
At first glance, it looks super compelling, but who knows, once we look closer, we might uncover some things that raise red flags. 🤔
Let’s kick things off with a quick intro for anyone who’s not familiar with what this protocol is all about.
WHAT IS ETHER(.)FI ABOUT
Back in 2022, Ether.fi entered the scene as just another liquid restaking protocol, founded by Mike Silagadze and Rok Kopp.
PS: We’ll explain what “restaking” means in just a moment.
Fast-forward a year, and momentum started building: a $5.3M seed round in March 2023, followed by a massive $27M Series A in February 2024.
In total, they’ve raised $32M — though the exact valuations remain under wraps. 😤
Since then, Ether.fi has broken out of the “liquid restaking box” and is quickly reshaping itself into something far more ambitious.
But let’s not get ahead of ourselves.
Here are some quick stats to give you more context:
- TVL: $10.4B
- Treasury: $5.5M
- Team size: 42
- Products: 3
- Market cap: $610M
- FDV: $1B
That puts them in the same league as many established DeFi players: a lean 30–50 person team, multiple products, solid runway, and a TVL to build on.
So what exactly are they building? Let’s break it down.
PRODUCTS
Ether.fi isn’t just about restaking anymore, they want to become a fully fledged crypto-native neobank.
To make that vision a reality, they’re steadily launching key products that lay the foundation for a full financial ecosystem.
- Stake
- Cash
- Liquid
- Trade (coming soon)
Let’s walk through them one by one.
Stake
This might sound familiar as we talk about staking a lot.
In fact, we just dropped a PRO report on one of the biggest Solana staking providers, Marinade, so make sure to check that out.
But with Ether.fi, things work a little differently. Mainly because it’s not just plain staking — restaking is part of the mix. Here’s how it plays out in practice:
1/ You stake $ETH on Ether.fi
2/ It is converted into staked $ETH so you earn staking rewards
3/ But it is also deposited into EigenLayer to unlock restaking rewards on top
4/ You receive $eETH, which is a liquid restaking token (LRT) representing your position
Before we get into the numbers, let’s quickly break down what staking and restaking actually mean.
Staking acts like a security deposit — it makes sure validators play by the rules when processing Ethereum blocks. If they don’t, they risk losing their stake (this is called slashing).
Restaking takes the basic idea of staking — putting up crypto as a guarantee that you’ll follow the rules and expands it beyond Ethereum itself.
✍️ With restaking, validators can reuse their staked $ETH to secure other networks or services that also need trust and reliability. It’s like saying, “I’m already proving I can be trusted on Ethereum, so let me use that same stake to back other systems too”.
This way, more projects can tap into Ethereum’s security without needing to build their own validator set from scratch and validators can earn extra rewards for taking on more responsibility.
The result? With $eETH, you’re not only earning the standard staking yield of 2.8%, but you’re also stacking an extra 0.3% from restaking.
That brings your total to 3.1% with relatively limited risk since you keep full control of your own crypto keys, so your $ETH can’t be stolen by anyone.
Ether.fi only chooses the trusted validators that run the technical part of validating blocks or other services to keep things safe and efficient for you. 🥳
You don’t need to get lost in the technical details.
The key takeaway is that Ether.fi managed to limit the main risks and keep users in control while still unlocking that extra restaking yield on top.
No surprise that people love it.
There are around 2.8M $eETH (2.3% of total ETH supply) sitting on EigenLayer — a clear sign of how successful this product has been so far.
And how do they make money? Just like other liquid staking providers such as Lido — by taking a 10% cut from staking rewards:
- 5% goes to validators
- 5% goes to Ether.fi
And then there is restaking yield that is fully passed on to token holders — meaning the protocol doesn’t take a cut on that front.
So why pick $eETH over Lido’s $stETH?
Because with $eETH, users also get the extra restaking yield (0.3%) on top.
But Ether.fi didn’t stop at offering a liquid restaking token — they’ve laid out a much bigger vision.
👉 To grow into a crypto-native bank by tapping into the monetization power that comes with owning the front end of an onchain financial system.
It’s easy to say, but much harder to pull off.
Let’s hold off on conclusions for now and see more of what they’re building.
Cash
Ether.fi rolled out the Ether.fi Cash Card in April last year — a Visa credit card linked straight to user portfolios.
👉 Unlike typical crypto cards that need pre-funding, this one lets assets like $eETH or stablecoins stay in your wallet, keep earning yield, and then get used for payments when the bill comes due.
That’s a big step toward wider adoption.
Billions of people already use credit cards every day, and the idea of earning yield on your balance while also getting cashback (3-4%) on every purchase sounds almost too good to be true.
But it is true and if we take a look at daily spending with these cards, the trend speaks for itself.
The numbers are still on the smaller side, with around $1M spent daily using the Ether.fi card and “only” 29K cards being issued.
But what’s more exciting is the accelerating growth — that’s where the real story lies.
We could look at more charts (transactions, new cards or active cards) and the trends all show a similar upward curve. 👏
It feels like a step in the right direction, as the product is unique and could draw in a lot more people over time.
Can you feel how smoothly this ties traditional finance (credit cards) with DeFi (earning yield)?
This is exactly the kind of product we’d love to see more of.
✍️ There’s still a clear gap — using crypto doesn’t yet feel as seamless as using the traditional systems. But it SHOULD, and products like this bring us closer to that reality.
Great, but you’re probably thinking: how does this actually make money?
- Interchange fees: Every time someone uses an Ether.fi Cash credit card, the merchant pays a small fee and Ether.fi takes a slice of it.
- Forex fees: If a user changes money from one currency to another (like dollars to euros).
- In-app swaps: When you pay with the card, your chosen crypto is automatically swapped into $USDC behind the scenes.
So yes, there are ways to make money from this.
🔥 These multiple revenue streams also allow Ether.fi to give back a portion as cashback — a smart way to incentivize users and encourage regular use of the card.
Speaking of smart moves, Ether.fi knows everyone loves yield (who doesn’t?), so they launched this new product called Liquid.
Liquid
This product lets users deposit $ETH, $BTC, $HYPE, or stablecoins into a vault that automatically allocates those assets into the best opportunities available.
It’s pretty similar to something like Morpho. Users can choose from different vaults, each managed by a curator who’s in charge of actively moving funds around to chase the best yield.
Another great example is Sky. If you’re unsure which vault to choose, how to diversify, or who the best curator is — just use $sUSDS. Sky takes care of all the heavy lifting for you.
Back to Ether.fi — they either run these DeFi strategies in-house or team up with other protocols to offer them.
In both cases, Ether.fi can take a share of the yield as part of the deal. And people love these liquid vaults.
The number of daily depositors has been rising steadily, now hitting around 700 per day (left axis), with total cumulative depositors reaching almost 60k.
These products now hold $1.1B in TVL, with a current holder base of around 12k.
The standout performer?
Liquid $ETH, which makes up a massive 75% of the Liquid product and is currently offering a yield of around 4.8%. 🥳
That yield comes from tapping into various DeFi strategies across platforms like Aave, Pendle, Morpho, and others — so it’s no surprise users are flocking in.
Initially, the Liquid $ETH vault came with a steep 2% fee, which was Ether.fi’s cut.
But in late July, the community voted to temporarily lower fees on ETH liquid vault to attract more users and just like that, fees dropped significantly.
Right now, this product is bringing in just around $80,000 a week.
And it's unclear if Ether.fi will ever be able to bring fees back up to the original 2%.
It would be tough for users to justify keeping their $ETH in these vaults, taking on extra risk, while earning less than they could earn from simply holding $eETH earning 3.1%.
But let’s discuss that later. Now we want to introduce the product that is not live yet, but is coming out soon.
Trade
Just think about the current product offerings for a moment.
You’ve got a card you can use for everyday spending, plus you can earn yield on your digital assets while still keeping full control of them — that’s a pretty solid setup for most people (degens).
For folks who don't care about self-custody, the chance to earn higher rates than traditional banks offer — especially on stablecoins — can be a big draw.
So what’s still missing? A Trade feature.
Sometimes, you just want to buy or sell tokens right inside the same app where you're already staking, spending, or earning. Simple, seamless, everything in one place.
👉 Adding trading would complete the experience. It gives users all the tools they need without switching apps, which makes it more likely they’ll stick around.
Just look at Galaxy’s recent launch of GalaxyOne.
They're already combining trading with other financial features to create that all-in-one feel.
And they’re not the only ones doing it. Robinhood, Revolut, Jupiter, Coinbase One — they all follow the same approach by making it easy to buy, sell, and swap directly within the app.
In this context, Trade isn’t just a nice addition for Ether.fi, it’s essential.
👉 It’s the missing piece that would make their product suite complete and keep them competitive.
Ether.fi Trade hasn’t been officially announced yet or set the deadline, but we’ve got word from a reliable source that it’s on the way. 👀
Alright, now let’s dig into their moat to see what really sets Ether.fi apart and makes it hard for others to catch up.
Uh, Oh… 😧 The rest of this report is exclusive to Crypto PRO or PRO All Access members!
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WHAT’S LEFT INSIDE? 👀
- What’s Ether.fi’s moat – what makes them hard to compete with?
- Checking in on $ETHFI’s tokenomics — are new buyers bound to get rekt by dilution?
- Is $ETHFI currently undervalued or overvalued (and are we buying)?
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