30s Summary

Ether.Fi, a decentralized finance platform, has proposed buying back ETHFI tokens using 5% of its revenue and rewarding them to investors. This practice aims to increase the token’s utility and market presence and ensure rewards align with Ether.Fi’s growth. Initially, only those who had staked ETHFI for a month can receive these returns. The decision on the proposal will be determined by a vote from ETHFI investors. Ether.Fi, valued around $10 billion and yielding $60 million from fees and other earnings, faces competition from other platforms like Renzo and Kelp.

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Ether.Fi, a platform based on decentralized finance (or DeFi), has made a proposal on their community forum to utilize some of their earnings to buy back their own token, ETHFI. They’d distribute these bought-back tokens as rewards to those who’ve staked (or invested) in ETHFI.

Ether.Fi’s idea is to use about 5% of their revenue to buy these ETHFI tokens and divvy them out to the sort of investors we just mentioned. They want to do this to up the usefulness of ETHFI, beef up its market, and ensure that the rewards users get align with Ether.Fi’s growth.

They’re starting with 5% of the revenue but indicated that this is just the beginning. Initially, only those who’ve already staked ETHFI for at least a month will be able to get these rewards.

The final decision on this proposal will be made by the end of the week, after a vote from folks who’ve staked their money on ETHFI tokens. As it stands, Ether.Fi already uses part of its revenue to repurchase tokens from the main ETHFI pool.

So, what’s Ether.Fi all about? It’s a platform that specializes in what’s known as ‘liquid restaking’. Basically, it’s a pretty popular DeFi platform with nearly $10 billion value locked into it. Restaking is about taking a token that you’ve already invested in, and using it to secure rewards on other platforms.

These ‘liquid restaking tokens’ are essentially a way of claiming a share in a pool of these re-invested assets. Since its launch in 2023, Ether.Fi has made around $60 million from fees and other sources of earnings. The total value locked into DeFi is nearing 2021’s record highs, in part due to the rising popularity of restaking and LRT platforms.

Ether.Fi isn’t in this alone, though. It’s got rivals like Renzo and Kelp, and the current value of the top five LRT platforms is around 3.38 million ETH, or about $12.5 billion.

There’s been a growing demand for DeFi platforms to give the folks who’ve bought their tokens a piece of the platform’s earnings. Alongside Ether.Fi, other platforms like Ethena, Sky (previously known as Maker) and Aave are testing out ways to give more value to those who’ve bought their tokens. Just last month, Ethena, a platform for yield-bearing stablecoin, decided to distribute a portion of its $200 million revenue to its tokenholders.