ether.fi Abandons Restaking Protocol EigenLayer Amid Waning Yields

ether.fi has announced it will be severing its ties with EigenLayer, a restaking protocol that allows users to earn dual yields on their staked Ethereum (ETH). This decision comes after ether.fi's most liquid staking token, weETH, was decoupled from the restaking functionality in August. Users must now opt-in separately to another token deployed on Symbiotic to participate in restaking.

In an interview with CoinDesk, CEO Mike Silagadze stated that the decision to exit restaking was driven by risk considerations: 'There are no longer substantial yield opportunities in the restaking sector, and stakers have become aware of the risks, so we chose to exit.'

The promise of dual yields on restaking has failed to materialize, with fees paid by demanders purchasing security services consistently failing to cover basic staking yields and risk premiums. As of September 8, DefiLlama data showed that total TVL in the restaking sector stood at $10.02 billion, generating only $99,977 in fees over the past week.

ether.fi has since launched a crypto consumer card allowing users to spend directly without selling crypto assets and deployed a lending market on the Ethereum Layer 2 network Optimism.