ether.fi (ETHFI): a crypto neobank built on liquid staking, and what makes it risky

ether.fi started in 2023 as a non-custodial ETH staking protocol. In 2026 it describes itself as “a non-custodial crypto neobank”, and the description fits the money: Blockworks Research wrote on 20 October 2026 that Cash, the card business, already brought in most of the protocol’s revenue. The staking arm is still the larger pool of assets, with $4.34 billion on DefiLlama on 1 November 2026, about 65% below its peak of $12.43 billion on 14 August 2025.

What makes it risky has moved with the business. A holder of eETH or weETH now depends on a 3-of-3 oracle committee and two Safes whose signers are published as addresses, not names. A Cash borrower depends on an Aave V4 market that went live in August 2026. An ETHFI holder depends on a buyback that, by Blockworks Research’s reading of the team’s dashboard, is going almost entirely to cashback. Nothing has drained ether.fi’s core contracts, but September 2026 alone brought two incidents at its edges.

What is ether.fi? Staking, a vault arm and a Visa card

ether.fi sells four things under one app. Stake turns ETH into eETH or weETH. Liquid is a set of automated strategy vaults. Cash is a Visa credit card with a mobile app, paid from a balance (Direct Pay) or by borrowing against crypto (Borrow Mode). Markets offers crypto trading and tokenised stocks and metals, which ether.fi says are not available in the United States or certain other markets.

Three DefiLlama listings give a sense of size on 1 November 2026: $4.34 billion in Stake, $380 million in Liquid and $303 million in the ether.fi borrowing market. A fourth, ether.fi Cash Liquid, filed as a crypto card issuer, shows $241 million. Optimism’s blog put the whole platform at more than $6 billion in August 2026, a figure that uses different boundaries.

How eETH and weETH work

You deposit ETH into the protocol’s liquidity pool and receive eETH, a rebasing token: your balance grows as rewards arrive. Wrapping eETH gives weETH, whose balance stays fixed while each unit comes to represent more eETH. The rewards are the same in both forms, consensus-layer and execution-layer income from Ethereum validators, and they are variable. ether.fi recommends weETH to DeFi integrators. Our guide to liquid staking tokens explains why rebasing and non-rebasing versions exist.

Getting out has two doors, according to the integration guide. Instant redemption swaps eETH or weETH for ETH or stETH, minus an exit fee, and only works while the pool’s buffer sits above a low watermark. The queued route mints a withdrawal NFT with no fee, and you claim once it is finalised. ether.fi gives no fixed waiting time: it depends on liquidity, validator exits, demand and network conditions. The guide does not publish the exit fee rate or the watermark.

The price of weETH rests on a report. A committee of three oracle members must agree unanimously on each rebase report, and a contract rejects any report above a 5% annual rate. That cap limits how far a bad report can move share value. ether.fi’s own risk page also lists weETH trading below its redemption value as a risk, which matters to anyone using it as collateral.

Node operators, bonds and the staking fee

ether.fi says it stakes through a curated set of professional operators running different software, and that no ether.fi validator has been slashed since launch. Its node operator compliance page has 18 entries, among them Galaxy Digital, P2P.org, Stakefish, Nethermind / Twinstake and Blockdaemon, with each one’s headquarters and its ISO 27001 and SOC 2 status, compiled from public and self-reported information. The docs send readers to Rated for the live list. We did not check how much stake each one runs.

The original design was more unusual. An older version of the technical documentation split each 32 ETH validator into a transferable T-NFT with a 30 ETH claim and a soulbound B-NFT with a 2 ETH claim, whose holder owned the validator keys and bore a 0.5 ETH deductible. Operators won slots through an auction. The current documentation no longer describes this model, so we cannot say how much of it is still live or whether operators post any bond today.

The staking fee sits in a legal appendix, not in the product docs. The pricing plan in ether.fi’s Terms of Use, last modified on 9 September 2026, gives 90% of staking rewards to stakers, 5% to node operators and 5% to the protocol. DefiLlama’s numbers do not match that split: $1.91 million of revenue on $10.48 million of fees over 30 days to 1 November 2026, about 18% by our arithmetic, and about 20% over 12 months. DefiLlama’s method bundles validator operations and restaking into its fee line, and we cannot reconcile the two.

The EigenLayer exit: why eETH is no longer a restaking token

Certora’s core audit of January 2026 still described ether.fi as a liquid staking and restaking protocol with deep EigenLayer integration. That description has gone stale. ether.fi now says eETH and weETH carry no restaking rewards and no EigenLayer slashing exposure. Its weETH page says that as of August 2026 under 1% of protocol assets remained restaked, with removal planned by the end of the third quarter and EigenPod withdrawal credentials gone by the fourth. Its slashing page goes further and says ether.fi no longer restakes through EigenLayer. We did not check on-chain which statement is current. Certora reviewed the change on 24 and 25 August 2026, in a report titled EigenLayer Deprecation, and logged one low-severity finding and eight informational ones.

Restaking survives as an opt-in. weETHs, built on Symbiotic and powered by Veda, takes deposits such as WETH, eETH, weETH and wstETH. Its page warns of a less familiar chain: part of the deposits goes to Cap Protocol, where M11 Credit borrows funds that flow to FalconX, so a holder takes counterparty risk as well as slashing risk. Withdrawals can take up to seven days. Our restaking guide covers the general mechanics.

ETHGas: the $3 billion validator commitment

The Block reported on 14 April 2026 that ether.fi was committing $3 billion worth of ETH to ETHGas, a marketplace for Ethereum blockspace futures, for three years. The ETH is “validator liquidity”, not a cash investment, drawn from what The Block called more than 2.8 million ETH under management. DefiLlama counted about 2.3 million ETH in Stake that month. ETHGas put the commitment at about 40% of ether.fi’s holdings, and a report of 15 April said ether.fi agreed to use ETHGas’s preconfirmation platform exclusively during the term. “Ether.fi’s commitment gives us the validator depth to make that market real,” founder Kevin Lepsoe told The Block.

We could not find the full terms, including who bears slashing and how extra income reaches eETH holders. A Chaos Labs analysis on ether.fi’s forum, dated May 2025 and so older than the deal, relayed ETHGas’s own estimate of 15 to 20 basis points of extra annual yield near term. It flagged off-chain accounting for rewards and slashing, and the absence of a veto committee or insurance fund. Chaos Labs is itself a paid service provider to the ether.fi Foundation, according to the filing.

Liquid vaults: Veda, Midas and a curator

A Liquid deposit goes into a vault that spreads it across DeFi positions. Most vaults run on Veda’s BoringVault design, with strategies limited by Merkle proofs, and the real-world asset and reserve vaults run on Midas. ether.fi’s Liquid FAQ calls Nonce Capital the primary strategy provider for all live vaults. Returns are not guaranteed. The FAQ describes a platform fee and a possible performance fee, taken from the vault balance, but gives no rates, and the filing says the platform fee varies by vault. Withdrawals can take up to three days, or seven for Liquid USD RWAs.

Liquid has followed Stake down. DefiLlama shows $1.157 billion on 29 September 2025, about $240 million in May and July 2026, $448 million on 24 September 2026 and $380 million on 1 November. For this arm the fee line is tiny. DefiLlama counts $52,221 of revenue over 30 days.

ether.fi Cash: from a Hong Kong card to an Aave V4 market

CoinDesk reported the card on 9 September 2024 as a Visa credit card with 3% cashback, starting in Hong Kong, with Scroll as settlement layer. The card would stay out of the United States at first. Rain ran the card program, and the volume passed $1 million within weeks, according to Rain. The 2025 filing, for its part, dates the launch of Cash to May 2025. Today the product runs under different terms. The cardholder agreements, in US and international versions, are with Ether.Fi Cash Inc. or Ether.Fi Cash Ltd., name Third National as the issuer under a Visa licence and apply Puerto Rico law. ether.fi’s help centre says cashback is now earned in ETHFI, with a seven-day lock, at a rate set by membership level, monthly spend and currency. We could not confirm a current fee schedule or country list, and the card is not affiliated with the protocol, ether.fi says.

Adoption figures need care, because they do not match. Optimism’s blog, written by a partner in the deal, said in August 2026 that more than 100,000 people carry an active Cash card and over 300,000 accounts use it, then spoke of “tens of thousands of people” further down. ether.fi’s own Aave proposal said “tens of thousands of cardholders” in July. Alea Research, with data to 9 February 2026, counted 8,000 active cards and annualised spend of $663 million. None defines “active”. Blockworks Research saw weekly spend rise from $27.6 million to $31.0 million over the eight weeks to mid-October, which annualises above $1.6 billion by our arithmetic.

The credit side changed in August 2026. Cash moved from an in-house Debt Manager to a dedicated Aave V4 instance on OP Mainnet, operated by ether.fi, after Aave’s TEMP CHECK, ARFC and AIP stages. The ARFC, posted on 14 July, set these terms: 80% of revenue to ether.fi and 20% to Aave, a two-year initial licence, up to $175 million of launch assets from ether.fi and $20 million from the Optimism Foundation’s treasury. Supply is open to anyone, while only ether.fi’s KYC-verified cardholders can borrow. Our Aave page covers the wider lending protocol.

Loans stayed small but have grown: about $22 million in Optimism’s August post, $26 million in the DAO proposal that month, and $42.1 million on Blockworks’ count in October. The target differs by source. The ARFC says roughly $500 million in assets by the end of 2026, while Optimism says $500 million of lending capacity by 2027.

The parameters show where the risk sits. The addendum of 23 July set launch collateral factors, the line at which a position can be liquidated, at 95% for USDC and USDT, 75% for weETH and WETH, 70% to 80% for Liquid vault tokens and 30% for ETHFI and sETHFI. The liquidator’s maximum bonus runs from 1% to 5% by asset, and the protocol keeps 10% of that bonus. Final settings were left to the later vote. Nonce Capital is the market’s independent risk admin, with authority over collateral listing and oracles, and it also runs the Liquid vaults accepted as collateral there. The proposal presents that as familiarity and calls Nonce organisationally independent of the operator. The overlap is real all the same: the firm sets the terms for tokens of vaults it manages.

Certora reviewed the move to the new lending market from 20 July to 4 August 2026 and reported one medium finding, which was fixed, plus eight low and 11 informational ones.

Who controls ether.fi: 6-of-10, 4-of-7 and one automated key

The team is partly public. Mike Silagadze is founder and chief executive. ether.fi’s Blockworks filing of 19 August 2025 also lists Jozef Vogel as COO and co-founder Rok Kopp, spelled Roy in the filing, as CRO. It describes three bodies: Ether.fi Labs, the operating company; the Ether.fi Foundation, which receives a share of revenue from Labs; and a DAO. It states no jurisdiction for any of them. Blockworks marks it “Partial”, with four gaps, and reviews filings for completeness, not accuracy. The Terms of Use fill one gap: users contract with Ether.Fi SEZC, a Cayman Islands special economic zone company, under Cayman law. We could not establish how that company relates to Labs or the Foundation.

Contract power is better documented than the company behind it. We read the thresholds, signer counts and timelock delays on-chain on 1 November 2026, and they match ether.fi’s controls page.

The Upgrade Admin design is strong on paper, and new: even if all three insiders sign, three outsiders must join them. It dates only from 29 April 2026. Before that, ether.fi’s signing changelog shows a 4-of-7 Safe and a 3-day delay on upgrades for about two years, and the Operating Admin ran on 3-of-5 with an 8-hour delay until mid-April. The trust matrix adds a real trade-off. There is no emergency upgrade path, so an urgent code fix also waits 10 days, and the delay protects only users who watch proposed code and can leave in time. The Operating Admin is different: insiders alone reach its threshold. ether.fi says no key can move user funds, and its matrix sets the limit of that claim: it holds “under the code deployed today”, and an upgrade could change it. A Signers page lists addresses, not people. It is also slightly out of date: on 1 November one on-chain owner of the Operating Safe differed from the page, and two addresses sat on both Safes. Our glossary explains how a multisig wallet works.

According to the docs, an upgrade live since 14 July 2026 merged about 30 per-contract roles into nine tiers in one RoleRegistry, and added auto-expiring pauses, a blacklister and a daily cap on withdrawal finalisation. These controls cover the core staking contracts and weETH bridges. Liquid vaults run through Veda and their own Safe, and Cash has its own contracts.

ETHFI tokenomics: supply, unlocks and a date the sources dispute

ETHFI has a fixed supply of 1 billion, all minted. It began trading on 18 March 2024 at $4.13, with 115.2 million tokens in circulation, after an airdrop and a Binance Launchpool, CoinDesk reported. The filing gives this genesis split:

Tokenomist groups the same supply differently (33.74% investors, 21.62% treasury, 21.47% contributors, 19.27% airdrops, 3.90% partnerships). Investors and core contributors, 55.1% in the filing, stayed locked for 12 months and then unlock over months 13 to 36.

The end of that schedule is unclear. The filing says 18 February 2027. Tokenomics.com, which dates the start to 14 March 2024, says 15 March 2027, and on 1 November showed about 44.8 million ETHFI (4.5%) left across five unlocks, the next being 8.9 million tokens on 15 November. Tokenomist shows 99.85% unlocked and says the token is “fully unlocked” while also saying the schedule runs into 2027. We cannot settle this from public data. A reader should treat early 2027 as the end and the remaining amount as unconfirmed. Post-launch employees are on separate 36-month grants, with about 6 million ETHFI unvested in the August 2025 filing.

Market makers add another supply question. The Foundation lent about 11 million ETHFI to Amber, Pulsar and Selini on agreements of one to 1.5 years from 6 August 2025, so they expire between August 2026 and February 2027. All three also appear among ether.fi’s investors in The Block’s list for the February 2024 round, so the firms providing liquidity for the token also backed the company. The filing does not address the overlap. We could not confirm whether the loans have been renewed.

What ETHFI holders get

Votes on Snapshot, and a claim that keeps changing form. The filing says staked ETHFI (sETHFI) receives a monthly share of revenue set by token-holder vote, and that equity holders are not meant to receive value through dividends or share repurchases. Staked ETHFI now also earns membership points in the app. The September 2026 DAO proposal says ETHFI staked in account vaults rose from about 21 million to 28 million in 15 days. Whether the revenue share continues in its old form after that vote is not stated in what we read.

Turnout is thin. The programmatic buyback vote closed on 3 September 2026 with 100% in favour, but from only 80 addresses and about 1.14 million votes. The rsETH contribution in April drew 55 addresses. Earlier Snapshot votes in 2024 drew several hundred to about 3,500 voters.

The ETHFI buyback: what Blockworks Research found

The DAO has voted on buybacks since June 2024, and token holders approved a programme of up to $50 million, for use while the price stayed under $3, with 99.32% of votes on 3 November 2025. Alea counted $16 million of cumulative buybacks, about 3.5% of supply, by early 2026.

The September 2026 proposal changed the mechanism. Labs now sends a share of card, swap and staking revenue to the Foundation every week, and the Foundation buys ETHFI through TWAP orders on CoW Swap. Guidance was about $1.33 million a month, based on the previous month. Every user reward is now paid in ETHFI. In the proposal’s example, a swap fee splits into 40% for Labs, 30% for ETHFI held by the Foundation and 30% for ETHFI paid back to the user. Up to 20 million ETHFI from existing Foundation holdings backs the programme. The proposal describes no burn: bought tokens are held or handed out.

Blockworks Research tested the first six weeks against the team’s dashboard on 20 October. It reported $1.48 million sent to the Foundation since the week of 7 September, and $225,000 a week for three straight weeks, about 27% under guidance while card spend rose. The Foundation bought 1.81 million ETHFI at an average of $0.692 through 18 October. The proposal said half would stay in the treasury and half go out as cashback, the piece noted, but “it looks like nearly all of it is going to cashback”. The distributor paid out 1.83 million ETHFI, and recipients moved 70% of that out of their Cash accounts. Purchases to date were still 42% above exits, but in the week of 12 October exits exceeded purchases by 7%.

That is one research house reading one dashboard, and we found no independent confirmation. The author says he is bullish on ETHFI, and he credits the design: rewards are funded by revenue rather than emissions. ether.fi’s stated target is that purchases meet or exceed tokens sold, and the proposal says the Foundation can change cashback rates, fee splits or pace if the flow turns negative. Borrow revenue, about $31,000 a week, joins the programme once loans reach $50 million.

ether.fi TVL and revenue: what the numbers show

A dollar chart overstates the fall. DefiLlama’s token breakdown lets us separate ETH from price, and it shows real outflows too, though smaller and later than the headline suggests. The ETH count slid from 2.44 million in late March to 2.14 million by 20 May, a stretch that includes the Kelp exploit and the validator exits ether.fi made in response. The largest step came afterwards: 2.14 million to 1.68 million between 20 and 28 May. We could not find the reason, and these figures do not show cause and effect.

The revenue picture splits by source. Alea, with data to 9 February 2026, put annualised protocol revenue at $60 million: about 55% Cash, 39% Stake and 6% Liquid, with $19 million of annualised holder revenue. DefiLlama’s listings for Stake and Liquid do not include card income. On 1 November 2026 they showed:

One line does not fit. DefiLlama shows zero holder revenue for Stake over the last 30 days, while Blockworks describes weekly purchases in that period. We do not know why the two differ. Stake revenue is also running below its 12-month average: $1.91 million in the last 30 days against about $2.4 million a month, by our arithmetic.

ether.fi competitors: where it ranks

ether.fi Stake ranks third by TVL on DefiLlama’s liquid staking list, after Lido and Binance staked ETH, and it no longer competes as a restaker. Its Cash competition, other crypto cards and neobanks, is harder to measure with a single public number.

ether.fi audits, bug bounty and what the reports show

ether.fi claims more than 45 reports from over 10 firms since February 2023, split between a staking registry of 31 files and a Cash registry of 28. We opened seven.

Early code needed the work. Zellic’s review of March 2024 found 11 issues, five of them critical and one high, and it records a fix for each. It covered the node, liquidity pool and staking contracts, days before the token launch. The Certora re-audit of core contracts, dated January 2026, found no critical or high issue but listed eight medium ones, of which two were fixed and six acknowledged, several in the membership code. The June 2026 review of the security upgrade found seven low and 26 informational issues, with six and 10 fixed. All four Certora reports we opened still carry a draft mark on the cover.

The Immunefi bounty has been live since 27 March 2024 and pays up to $500,000 for critical smart-contract bugs, at 5% of funds directly affected. Nexus Mutual slashing cover runs up to 15,000 ETH for validator penalties, not restaking. The Hats competition of December 2023 paid out only $6,100 of a possible $72,000, and its top findings were one medium and several low.

ether.fi incidents in 2026: Kelp, AtomicQueue and Lido

All three hit ether.fi from outside its core contracts. Its own pages are the main record for each, so the accounts below are its version unless another source is named.

Kelp bridge exploit, 18 April

Attackers forged a LayerZero message that Kelp’s rsETH bridge accepted on a single verifier, producing about $292 million of unbacked rsETH, according to ether.fi’s write-up. ether.fi says it held no rsETH in Liquid and that weETH stayed fully backed. It still paused all Liquid vaults at 5:02 PM ET, reopening deposits and withdrawals after about a day, and kept bridging off until 23 April. Every weETH route now needs 4-of-4 verifiers, and bridging on eight L2s, including Scroll, Blast and zkSync, was set to end in June 2026. A DAO vote closed on 27 April with 93.78% in favour of putting up to 5,000 ETH of treasury money into the rsETH repair effort.

AtomicQueue exploit, 11 September

An old Veda withdrawal helper, with no owner and no pause, lacked a check that the paying account had consented. An attacker used leftover approvals from smart wallets, and victims signed nothing. ether.fi puts realised losses at about $40,000 on Ethereum plus about 2,257 sETHFI on Arbitrum, and says users are being reimbursed in full. TechFlow, citing SlowMist, reported about 15.45 ETH lost. ether.fi’s timeline ties a figure of 15.45 ETH to the first attack transaction, and copycats followed. Holders who used old Liquid withdrawals should still revoke that approval, ether.fi says.

Lido and MetaMask Staking, 30 September

According to ether.fi’s page, a compromise at a Lido node operator, MetaMask Staking, diverted 18 block rewards worth about 0.36 ETH. ether.fi paused stETH deposits at 22:48 UTC, before Lido’s public notice at 23:44, and reopened them at 14:26 UTC on 1 October, about 15.5 hours later. It says no ether.fi funds or validators were touched and no slashing had been reported. Lido’s forum post confirms the compromise and the validator exits. The count of diverted blocks is ether.fi’s own reading of on-chain data, which we did not retrace.

The list has an older entry: on 24 September 2024, an attacker used the recovery process at registrar Gandi to try to take over ether.fi’s domain account. The account was locked, and ether.fi says its sites, apps and email stayed safe.

Funding and regulation

The filing records $5.4 million raised in March 2023 and $27.3 million in February 2024, about $32.7 million in total. The filing gives only the month for the first round, and names no investors. The Series A announced on 28 February 2024 was $23 million, led by Bullish Capital and CoinFund, and Bullish’s announcement also names OKX Ventures, Consensys, Amber, Selini and others. The Block counted $27 million with a previously unannounced SAFE closed in late 2023.

On regulation, the statement that matters comes from ether.fi itself: it “is not a regulated financial institution”, and availability depends on residence, identity checks and account type. Calling a card app a neobank does not bring bank protections. We found no regulator action or licence to report.

Is ether.fi safe? Our risk rating and what to watch

We rate ether.fi 3 out of 5. In its favour: a 10-day upgrade delay we could confirm on-chain, a majority of external signers on upgrades, published audits, a live bounty and no loss to its core staking contracts. Against that stand a wide surface of modules and third parties, signers known only by address, upgrade controls hardened only in April 2026, a bond model it no longer documents, a growing credit book and thin token votes.

The risk differs by product. A weETH holder faces validator, oracle and redemption-liquidity risk. A Liquid depositor adds strategy and Veda or Midas risk. A Borrow Mode user can be liquidated once collateral falls through the limits set for each asset. An ETHFI holder depends on a revenue flow that, on Blockworks Research’s reading, goes back out as cashback. Nothing on this page is investment advice, and Coindaro makes no price forecast.

Next dates: the ETHFI unlock Tokenomics.com lists for 15 November 2026, removal of EigenPod credentials by the end of the fourth quarter, the Aave market’s $500 million target, Cash loans reaching the $50 million trigger, and the last investor unlock in February or March 2027.