Ether.fi Ditches Restaking Rewards for WeETH Holders

Ether.fi has made a change to its main product weETH, separating it from restaking rewards. This means that customers will now have a clear choice between basic staking and additional restaking exposure depending on their goals.

The change affects Ether.fi's $3.55 billion in customer deposits, making it one of the largest staking businesses in crypto. Until this week, weETH holders were taking on both risks whether they wanted the extra rewards or not.

This move comes as Ethereum's staking economics are under debate. A group of researchers proposed that the network stop paying people to stake once half of all ether is locked up. However, Ether.fi founder Mike Silagadze was among the critics, arguing it would push out smaller stakers and weaken products built on staking rewards.

The split also affects Ether.fi's finances, with the company capturing roughly $223 million in annualized fees and about $51 million in annualized revenue. In the second quarter, it earned $41 million in gross revenue and nearly $10 million in earnings after rewards and other costs, with only $30,000 of value distributed to ETHFI holders through buybacks.