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Key Takeaways
- Ether.fi removed restaking from weETH and will drop EigenPod credentials by year-end, citing a lack of meaningful yield.
- Restaking earned about $99,977 in weekly fees versus $27.35 million for liquid staking, roughly 53 times less per dollar secured.
- Ether.fi’s neobank pivot is backed by a growing card business, but its 38% revenue growth claim conflicts with DefiLlama’s 47% gross profit decline.
Ether.fi, Ethereum’s largest liquid restaking protocol, will cut its last structural tie to EigenLayer this quarter. Protocol documentation put under 1% of its assets still restaked as of August. DefiLlama data show the wider restaking category generating a small fraction of the fees earned by plain liquid staking.
Ether.fi Strips Restaking From Its Core Token
When ether.fi launched in 2024, deposits were restaked on EigenLayer automatically. In August, the company removed restaking from weETH, the version of its token that circulates and is accepted as collateral across DeFi, leaving it as a plain liquid staking token.
Users who still want restaking must opt into a separate token built on Symbiotic, a rival platform. EigenPod withdrawal credentials are due to be removed by the end of the year. Chief Executive Mike Silagadze said the decision came down to risk.
“There were no meaningful yield opportunities in restaking.”
Silagadze also said stakers perceived some risk in the product, which factored into the exit.
Restaking Earns a Fraction of Plain Staking
Restaking lets ETH that already secures Ethereum be rented out to other services, such as oracles and data availability layers, which pay for the protection. Liquid restaking tokens gave depositors a tradable receipt for that position. EigenLayer held $19.7 billion at its peak, and liquid restaking tokens grew more than 1,000% in the first six weeks of 2024.
The services buying security did not pay enough to cover both base staking yield and a premium on top. On Sept. 8, DefiLlama’s restaking category held $10.02 billion and generated $99,977 in fees over the prior week. Liquid staking held $51.87 billion and generated $27.35 million. Per dollar secured, ordinary staking earns roughly 53 times more.
Two developments removed remaining incentives. Points programs that subsidized deposits wound down through 2025, and slashing went live in April 2025. Slashing confiscates part of an operator’s staked ETH for misbehavior, so restaking carried a priced downside without added yield.
The five largest remaining liquid restaking tokens, Renzo, Kelp, Swell, Puffer Finance and Bedrock, earned $953,350 in combined gross profit in the second quarter of 2026. The same five earned $2.18 million three quarters earlier.
Puffer, which raised $23 million, recorded $21,590 for the quarter, and Swell recorded $22,370. On Kelp’s books, EIGEN token rewards appear as $460,600 in both revenue and cost of revenue, meaning the protocol retained none of it.
The Kelp Exploit Hit the Token Wrapper
On April 18, an attacker exploited Kelp’s cross-chain bridge and created 116,500 rsETH in 46 minutes, worth about $293 million, with no ETH backing. The attacker deposited the tokens into Aave as collateral and borrowed real ether against them.
Around $6 billion left Aave in the following days, with potential bad debt estimated at $123 million to $230 million. In May, Aave rewrote its collateral listing standards to assess cybersecurity and technical architecture alongside price volatility.
Silagadze said the cause was poor cross-chain security practices and was unrelated to leverage. He said the ether.fi market on Aave uses conservative parameters. EigenLayer itself did not fail, and nothing was slashed. The loss occurred in the tradable receipt layered on top of the restaking.
Capital Shifts to Curated Vaults
Capital leaving restaking moved from ETH-based strategies toward dollar-denominated lending through curated vaults. In these pools, an outside curator rather than the lending protocol decides which assets are accepted. Morpho, the largest venue, holds about $5.8 billion.
The model has produced its own failure. On Nov. 4, 2025, Stream Finance disclosed roughly $93 million in losses and froze withdrawals, and its xUSD token fell 77% in a day. Vaults built on Morpho valued xUSD at a fixed $1, so automatic liquidations did not trigger as its market price dropped.
Researchers later mapped roughly $285 million of debt exposure across lending platforms. A second dollar token, 65% backed by loans to Stream, fell about 98% and was wound down.
Ether.fi Pivots to a Neobank, With Disputed Figures
Ether.fi now offers a spending card backed by crypto holdings, a borrowing market on Optimism and a set of vaults, and it describes itself as a crypto neobank. Silagadze put the neobanking market at roughly $300 billion in annual revenue, about 300 times DeFi’s. The card grew from 17% of monthly revenue in January to 46% in July.
Silagadze said the company is on track to raise its revenue run rate about 38% this year, while staking and restaking revenue has fallen 70%. Ether.fi has not published the basis for the 38% figure.
DefiLlama shows a different trend. Ether.fi’s gross profit fell 47%, from $18.71 million in the third quarter of 2025 to $9.99 million in the second quarter of 2026. In that quarter, card fees produced $3.14 million of gross profit and EigenLayer restaking produced $2.87 million.
DefiLlama also books $5.83 million of card cashback as both revenue and cost. Silagadze said third-party partners no longer pay that subsidy, so current revenue reporting excludes it.
EigenLayer Repositions Around Verifiable Computing
EigenLayer, now marketed as EigenCloud, sells verifiable computing, which lets applications prove that off-chain work was performed correctly. Restaked collateral sits underneath as a supporting layer.
Its holdings stand at $5.10 billion, down from $22.06 billion in August 2025. EigenDA, its data availability service, runs on mainnet at 100 MB/s, and Symbiotic has integrated more than 50 networks.
