Ether.fi is now a vertically-integrated DeFi protocol turned non-custodial neobank: Staking (savings) + Liquid (earnings; yield vaults) + Cash (credit and payments), and imminently Trade (spot/perps via Hyperliquid). The bundle concentrates distribution, boosts retention, and lifts ARPU by turning base DeFi rails into consumer products—from restaking infrastructure to consumer fintech (but with significantly fewer boots on the ground; 29 full-time employees vs traditional banks’ hundreds or thousands).
ETHFI accrues value from programmatic buybacks (> $6.5M cumulatively). Bids are executed onchain with 25% of protocol revenue, distributing a portion with stakers (sETHFI) to target ~10% APY (amount adjusted based on the staking ratio) and burning the rest. Currently trading at ~1.4 beta to ETH, it offers both clean idiosyncratic upside and levered exposure to ETH while keeping hedging options open. Product suite expansion and wider revenue funnels provide an extensive degree of optionality. Each new business line adds a fresh stream of revenue, diversifies income, and increases resilience for adverse market regimes. The result: more paths to upside, more levers to manage downside.
ETHFI trades near $1.5 after a ~94% peak‑to‑trough FDV drawdown from TGE to the bottom. The last break from this floor late 2024 ran >2x, from $1B to $3B in FDV terms. If revenue step up and ETH stays risk‑on, a re‑rating is on the table. Downside is visible (~$1 support levels) and hedgeable; catalysts are coming from multiple angles: DAT staking strategies (ETHZilla deploying already in $100M tranches), enterprise adoption of Cash, and new product releases (Hyperliquid’s Trade and support for tokenized stocks). ETHFI/ETH hasn’t seen much of a re-price despite these significant upgrades, which creates a strong case for rotation as ETH bulls shift weights into strong DeFi tokens with still-to-be-created revenue streams.
If ETH chops, programmatic buybacks add steady demand and soften drawdowns. Meanwhile, exits from the ETH staking queue signal a shift to liquidity (e.g. ETH stakers want to keep the asset in hand and be ready to sell at will whenever). In a year-end volatility cluster with tariffs and rate cuts uncertainty, we think it’s more prudent to hold liquid ETHFI to catch the buyback/LP bid (note that not all is distributed, and anything above the ~10% target APY is burned), avoiding the ~10‑day delay from sETHFI staking. That flexibility gives peace of mind to offset sETHFI’s relatively small carry denominated in a volatile asset like ETHFI—buybacks still indirectly add pressure for holders nevertheless, with burns as the cherry on top. Best case, an ETH breakout lands alongside Ether.fi headlines with idiosyncratic upside.
Key Takeaways
- Beyond Staking, a Full Stack DeFi Neobank: More than simply an ETH-adjacent asset offering “beta”, Ether.fi’s vertical integration captures value for ETHFI from diverse revenue streams—savings, yield, payments, (trading soon)—with some of them offering exponential growth prospects.
- Lean, High-Output Team: 29 full-time employees; fintech-scale deposits with a fraction of the headcount (industry standard for that deposits scale ranges from ~1k upwards); cost savings passed directly to users via lower fees and higher yields.
- Structural Demand & Programmatic Buybacks: 100% of withdrawal fees + ~25% of protocol revenue accrues to ETHFI (targeting ~10% APY for sETHFI stakers; burning the remainder); founder on a mission to burn >10% of the supply next year.
- Near-Term Catalysts Cluster: Trade product on Hyperliquid, HYPE vaults, fiat rails, tokenized stocks, Solana expansion; dense window for re-rating expanding the total-addressable-market (TAM) and revenue streams; exogenous catalysts like DATs for even more rapid acceleration.
- Risks to Watch: Tokenomics clarity, execution delays, and yield compression; ETH beta drawdown, whale concentration, insider supply unlocks, and mutable governance-driven buyback policy.
Background: $11B TVL, 29 Staff
Ether.fi was founded in 2022 and is led by founder/CEO Mike Silagadze, a repeat founder who built Top Hat into a 500‑employee edtech platform used by millions before selling in 2021 and moving full‑time into crypto. When he co-founded Ether.fi with Rok Kopp, the team consisted of just 3 full-time contributors. The team shipped quickly: beta (Mar 2023), mainnet delegated staking (May 3, 2023), eETH restake‑ready LST (Oct–Nov 2023; fully live Nov 15, 2023), ETHFI TGE (Mar 2024 and Binance Launchpool), and Series A (Feb 2024).
Ether.fi closed a $23M Series A on Feb 28, 2024, co‑led by Bullish Capital and CoinFund, with participation from OKX Ventures, Foresight Ventures, ConsenSys, Amber, Selini, Draper Dragon, Arrington Capital, Bankless Ventures, and angels from Aave, Polygon, Kraken, Curve, and Ethena. Earlier, it raised a $4M seed led by North Island Ventures.
ETHFI’s supply is fixed at 1B and fully minted; circulating is ~466 M (46.6%) The dilution pattern has largely played out already: price and FDV is up 20% YoY to $1.6 and $1.6 B while market cap is up 250% YoY; float expanded ~3.3x on airdrops/vesting—now largely known and linearly unlocking through Feb 2027.
ETHFI confers governance rights and a buyback claim when staked as sETHFI. Today, 100% of withdrawal‑fee revenue and 25% of protocol revenue route to buybacks targeting 10% APY for stakers (burning any extra).
Full Stack Neobank
Ether.fi is a multi-line onchain neobank (with an iOS app to manage and spend DeFi yield/credit from your pocket) that runs a three‑layer stack: Stake (eETH/weETH for ETH; eBTC for BTC via Babylon/Lombard; eUSD via Ethena), Liquid (automated vaults allocating across curated DeFi strategies), and Cash (Visa‑branded card and credit against onchain collateral). Like a bank without custody, it covers savings (Stake), earnings/investing (Liquid), borrow/spend (Cash) and soon brokerage functions (Trade).
- Stake charges a 10% take‑rate on staking rewards; 5% to node operators, and 5% to the protocol treasury.
- 100% of withdrawal fee revenue for eETH redemption goes to ETHFI buybacks and sETHFI distribution.
- Liquid vaults charge an annualized platform fee on TVL, ranging from 1-2% depending on the vault (the 10-20% performance fee goes to the strategy/curator; not Ether.fi).
- Cash monetizes via card economics, e.g., ~1% FX, 2% ATM, and interchange fees.
- Trade will route spot/perps via Hyperliquid; builder codes make it possible to share fee-rebate savings (from staked HYPE) with users and retain a slice as revenue.
Vertical integrations make it possible to turn base-layer onchain primitives into a consumer product. Users earn, save, and spend from non-custodial accounts; the protocol monetizes yield skims, management/performance revenues, FX/spreads; and ETHFI token holders and stakers capture upside value through indirect revenue distributions (buyback-and-distribute for stakers; token burns for holders).
This is a market cycle where the winners own their stack: Hyperliquid fused perps and L1 (internalizing flows and revenue); Ethena’s Converge captures issuance and the activity it sparks; Ether.fi is executing the same playbook: Stake pulls in deposits, Liquid scales yield, Cash monetizes spend. Beyond buybacks, Ether.fi’s founder, Mike, has publicly expressed he is on a mission to burn >10% of the supply next year.
Each step charging fees that fund recurring buybacks, vertical integration reduces value leakage, lowers CAC, and tightens the link between usage and token demand. Owning ETHFI allows you to ride the integrated flywheel—not just be exposed to ETH beta.
Ether.fi’s moat isn’t eETH itself, but the operating system around it: strategy shelf and consumer card married into one balance‑sheet. Early DeFi scaled by shipping isolated primitives—LSTs, LRTs, yield vaults. Ether.fi, in contrast, builds the full stack and wraps it in a consumer bank UX, compressing the user journey into a single funnel, raising conversion, retention, and revenue density per user. Currently unchallenged at scale, the brand value gets stronger as a result.
Ether.fi is moving from infrastructure provider to demand aggregator; control of the full stack compounds retention. It has turned a commoditizing infrastructure wedge into the default interface where users save, invest, and spend (and soon also trade). This is how aggregators lock in users. Ether.fi has the stack, the venues, and the incentives to become the place where crypto balances across chains live and get used.
Ubiquitous Collateral, Sticky Liquidity
Product breadth unbundles narrative risk: Ether.fi first built distribution around eETH by making it ubiquitous across DeFi (Aave, Morpho, Spark, Pendle, L2s, EigenLayer, Symbiotic, Babylon, etc), then routing revenue back to tokenholders—turning what could have been a transient airdrop boom into a sticky and active balance sheet partnered with DeFi blue-chips.
Ether.fi is directly embedded into other protocol’s core workflows, actively expanding operations on strategic market segments and ecosystems (Hyperliquid and Solana coming next). 500+ CeFi/DeFi integration touchpoints make Ether.fi’s assets default collateral rail for money markets, treasuries, and credit. Becoming ubiquitous infrastructure has allowed the protocol to scale sticky liquidity. When you are in every stack, you are the stack.
Rather than chasing users, Ether.fi’s advantage comes from capturing flows. Integrations route TVL (AUM) to Ether.fi by default, and Ether.fi also channels liquidity into other protocols (e.g. Liquid adds TVL; Cash borrows from lending markets). This distribution power turns deposits into fee flow, which the protocol recycles into programmatic buybacks.
That’s the differentiation: competitors fight for TVL while Ether.fi creates positive-sum dynamics within and across L1 and L2 ecosystems. That way, Ether.fi wins the right to be used everywhere value actually moves—integrations bring new assets and economic activity to partner platforms as well, not just to Ether.fi.
Looking ahead, revenue durability is the name of the game. Ether.fi has crossed the rubicon from “TVL story” to “revenue engine with a programmatic bid.” Price action should increasingly track revenue and buyback capacity rather than depositor headlines. Cash is the wedge for the next leg up, coming from mainstream demand. Topline sensitivity now includes a consumer and B2B (SMB) channel that allows for faster iteration cycles than simple TVL.
ETHFI is not only the vehicle for converting protocol revenue into a persistent, programmatic bid for the token, but also one of the cleanest ETH-levered ways to monetize the leg of upside. This comes at an opportune time when DATs open up a new set of possibilities (first $100M from ETHZilla already in, with more to come from this and other DATs). ETFs are constrained—they cannot chase DeFi yield; they may stake, but only minimally—but ETH treasury companies can lend, stake, restake, borrow, and loop, producing orders‑of‑magnitude more onchain engagement. This can be a demand shock that may catch many by surprise. Ether.fi is taking a proactive approach on that front, and Mike’s team is well connected with strategic partners to make that happen sooner than later.
Multiple Engines, One Persistent Bid
Ether.fi runs three engines—Stake, Liquid, and Cash—feeding a transparent buyback. Revenues in, buybacks out, it turns protocol revenue into a steady endogenous bid. Generating ~$70M annualized revenue, that’s ~$25M yearly in buybacks ($2M/month) with ~25% of protocol revenue.
Adoption has shifted from early-stage airdrop‑driven breadth to mature aggregator‑driven depth. The revenue mix diversified: Stake’s share fell to ~54% in September 2025 as Liquid and Cash increased, and weekly revenue set new highs, with ~$39M cumulative since Oct‑2024. Today, the protocol sits at mainstream‑fintech scale, but with a fraction of the users.
Ether.fi is already moving neobank‑level volume with a club‑sized user base. September’s Cash card spend is on the same order as a small issuer’s monthly card program, ~$14m (30% of all volume) in, delivered by just ~5k Daily Active Cards (~$57k per card annualized, still above the U.S. median income of $42k). Scale without scale; few users, huge throughput.
To date, growth is textbook power-law: a handful of large accounts supply most of the capital and yield most of the protocol returns. The consumer side is also anchored by those same whales. While Daily Active Cards and card adoption both doubled (+102% QoQ), the spend curve is still top‑heavy. First, few users and huge notional—then the curve bends as distribution compounds. The current bull target set by the team is to get 100k card users by year-end, with the more conservative base case at 40k.
Importantly, we see Ether.fi’s Cash as the leading card in the market today, both in volume and features—key to justifying the metrics above. It is not a custodial CEX card, which is why those were excluded from our analysis. The product has a significant untapped TAM (total addressable market), and its abstraction layer is being designed to onboard both sophisticated investors—who currently pay thousands for premium card subscriptions—and everyday users, all of whom are likely to flow into Ether.fi’s other products.
Valuation Expansion on Durable Revenue
Today, overhead supply is thinner after float expansion and better depth. The path of least resistance is multiple expansion coupled with revenue durability and strong buybacks as a backdrop. ETHFI’s valuation has compressed while the productivity of its economy significantly improved. P/S (FDV) is down-50% YTD (from 54x to 24x), making the asset more attractive on a revenue basis.
Our valuation thesis is “Cash Revenue will drive the bid; ETH price accelerates the ramp-up with higher Staking revenue (two largest revenue sources). Accumulation into current compressed P/S offers asymmetry.
We apply a modest multiple expansion in our Base and Bull scenarios, while keeping the Bear multiple unchanged. Significant growth in Cash is expected—this will be the main revenue driver.
In our Base case, we assume 100k users (aligned with the team’s EOY Bull target) within 12 months (the valuation time horizon). At ~$50k spend per user, this translates into ~$5B in aggregate spend volume. In this scenario Cash would dominate revenue, accounting for roughly half of the total.
Monitoring Cash’s growth requires tracking active cards and spend volume, as well as the spend per user. The main risk in our estimates lies in the spend per user assumption, which may be overstated. Right now, 3rd world countries are included within the TAM, with emerging markets like Brazil recently spiking the number of active cards. Unlike the U.S. market or the current cohort of crypto whales, these countries have lower incomes and expenses.
Lower income could be offset by higher user growth, since aggregate spend volume is the ultimate KPI. Applying a 1.5% fee on spend (1% from interchange plus additional layers Ether.fi is expanding into, such as FX), Cash alone could generate 9-figure revenues—up to a quarter-billion in our Bull case.
- Base Case: +158% upside, $3.9b valuation, $130M revenue at 30x P/S (fdv).
- Bull Case: +908% upside, $15b valuation, $380M revenue at 40x P/S (fdv).
- Bear Case: -41% downside, $900m valuation, $37M revenue at 24x P/S (fdv).
In the worst-case scenario, we have a 1:4 R/R position, with significant tailwinds and protection from key support levels (~$1 psychological barrier and all-time trendline breakout on the log scale). We’re being relatively conservative by having small multiples expansions both for our base and bull valuation outlooks. The following table provides a view into what an euphoric run on multiples (>70) could look like, with the the smallest Revenue plotted ($20m) leaving only -7% downside vs ~18x upside at our $380m revenue bull case:
Heading into year’s end, we view liquid ETHFI (spot) as a better choice to sETH to avoid lockups, maximize sensitivity to buyback‑driven demand in secondary markets, and stay liquid for an ETH ~$5k breakout and potential ETHFI spike into our targets. Ether.fi can’t be bucketed within a market sector of competing projects; it is the most complete bundle that abstracts DeFi into a bank-like UX while staying self-custodial. AUM growth is table stakes; the step-function revenue improvements will come from Cash and Trade, re-rating the business as a consumer finance platform. Multiples are near cycle lows even as revenue power and product breadth improve. Our view: ETHFI will now start being priced more on Cash conversion than on raw TVL momentum. That’s the wedge.
Risks & Invalidations
The thesis unravels under three primary conditions: ETH fails to breakout past all-time-highs, buybacks decelerate with little attraction for ETHFI staking, or a general market downturn where supply unlocks outpace demand. Other setbacks could stem from counterparty and dependency risk. Reputation or compliance shocks—via Veda, Sentora, EigenLayer, or other partners—could disrupt existing product operations.
Without consideration of growth, today’s revenue run‑rate yields a big number in absolute terms but may be small versus net sell pressure when accounting for profit-taking and unlocks. We have already observed a power law in whale-driven TVL dominance, as well as in a few large accounts dominating capital and card activity. Holder concentration is, therefore, a risk to keep in mind.
Additionally, Ether.fi runs a broad roadmap with a lean team—and there could be delays. Similarly, DAT flows may not fully materialize this cycle (unlikely given that flows already started coming in; if anything, more news impacting ETHFI directly may be on the horizon), in which case the narrative overpromises and underdelivers while we bear the downside of revenue cyclicality.
It’s also worth keeping the ETHFI staking dynamics in mind. Right now the token-staking flywheel is relatively weak. With only ~5.53% of ETHFI staked and a declining staker count, the buyback‑to‑APY design increasingly rewards not staking. For instance, the last week of August resulted in 198 ETH (~$865k) of protocol revenue being used to buy 775k ETHFI, of which 670k ETHFI (>85%) were burned and 105k were distributed to stakers. This rewards liquid holders (they can sell whenever and capture burning pressure) while not incentivizing stakers (since their APY upside is capped).
For the time being, the low staking ratio may be perceived as a feature, not a bug (although liquid holders are subject to the governance power of stakers). Rational holders skip staking to keep immediate liquidity and avoid a 10‑day cooldown. With a low staking proportion, a large share of the 25% buyback budget gets burned rather than distributed—non‑stakers free‑ride.
High beta to ETH also poses risks, as the L1 sector is highly competitive. ETH, however, retains liquidity moats as the largest settlement layer, which we don’t see going away. Despite the growing product line, a large share of revenue still comes from ETH-adjacent products like Staking, and the token maintains a high beta to ETH. As such, downside exposure to both isn’t unexpected in a significant market downturn—which is inevitable at the end of bull cycles, even if its timing is unpredictable.
ETHFI began as a leveraged play on ETH through its core restaking product and has consistently maintained a high ETH beta, historically around the 1.5 range. Unlike other protocols, however, ETHFI is not fully dependent on ETH anymore: its Cash product provides a sustainable and diversified revenue stream, making it more compelling from a return-spectrum perspective.
Conclusion
Ether.fi is executing the right bundle at the right moment. The business already shows traction beyond staking, and a dense roadmap of catalysts can coincide with ETH-beta chasing past all-time-highs. Revenues are growing, its mix is diversifying, and buybacks are now a structural feature that directly connects operating performance to token demand. We are long ETHFI into a potential ETH breakout and Cash becoming mainstream (already the largest DeFi card).
Given volatility and recent exits from ETH’s staking queue (holders want to stay liquid; optionality past $5k), we also prefer to stay liquid and capture upside via ETHFI’s buyback bid instead of locking in sETHFI staking (10-day withdrawal delay). If buybacks hold, revenues diversify, and ETH clears new highs past $5k, add on dips and keep accumulating until your cycle‑top view changes. If buybacks slip, governance cuts allocations, or ETH loses momentum and key support, cut and reassess.
For larger investors seeking exposure to mature, high-revenue protocols with significant upside—as partial ETH proxies but with greater asymmetry—ETHFI stands out. It also offers significant liquidity, with token turnover averaging ~10% of FDV daily over the 30 days leading up to August 20th (when we published our ETHFI Q3 Benchmark report).
References
Chaos Labs. Ether.fi Risk Overview.
CoinGecko. Ether.fi (ETHFI) Asset Page.
CryptoCardHub. Ether.Fi Cash Card.
DeFiLlama. Ether.fi Protocol Overview.
Dune. Dune Dashboards Portal (ether_fi).
Edge Podcast. How Ether.fi Built A Neobank With DeFi.
Ether.fi. Governance Docs (GitBook).
Ether.fi. Official Links (Forum Thread).
Ether.fi. Token Transparency Framework Report (PDF).
Ether.fi Foundation. Medium Profile.
Token Terminal. Ether.fi Project Dashboard.
Disclosures
Alea Research is not engaged in a commercial relationship with Ether.fi for the production of this report and was not paid for or commissioned in any way.
Members of the Alea Research team, including those directly involved in the analysis above, may have positions in the tokens discussed.
This content is provided for educational purposes only and does not constitute financial or investment advice.
You should do your own research and only invest what you can afford to lose. Alea Research is a research platform and not an investment or financial advisor.