Ether.fi's Ambitious Neobank Launch Hides a Troubling Decline

The neobank Ether.fi launched its Summer release on August 13, featuring tokenized stocks and metals trading, an integrated Aave market on Optimism, fiat rails in over thirty currencies, and programmatic ETHFI buybacks.

Credit where it is due: the company delivered a genuinely ambitious product. However, beneath the surface lies a more complex story. The company quietly ended its restaking arrangement with EigenLayer, which was the core of its business, and watched its staking arm decline by 73% in a year from $12.43 billion to $3.3 billion.

The charitable reading is that management saw the writing on the wall and diversified into consumer fintech before the first business became a problem. The skeptical view sees Ether.fi competing with actual banks and brokerages instead of other DeFi protocols, with its product geofenced out of the largest consumer market on earth.