Overview

ether.fi is a non-custodial liquid restaking protocol on Ethereum. A user deposits ETH and receives eETH (or its wrapped, DeFi-composable form weETH), a liquid token that represents a position which is staked on the beacon chain and simultaneously restaked through EigenLayer. Unlike custodial staking services, node-operation keys stay with the staker rather than the protocol, which ether.fi frames as its core "non-custodial" design (see the protocol documentation).

By 2026 ether.fi had grown into the largest liquid restaking protocol and one of the largest liquid-staking protocols overall, second only to Lido by total value locked — live figures are tracked on DeFiLlama. Governance and the protocol treasury are directed by holders of the ETHFI token through the ether.fi DAO.

From staking to restaking

ether.fi sits one layer beyond classic liquid staking. Protocols like Lido (stETH) and Rocket Pool (rETH) issue a liquid receipt for ETH that is only validating Ethereum. ether.fi's eETH is additionally restaked into EigenLayer, where the same ETH secures actively validated services (AVSs) in exchange for extra rewards — and takes on the extra slashing surface that restaking introduces.

This makes ether.fi the reference example of the liquid restaking token (LRT) archetype: a governance-bearing DAO wrapped around a staking position whose risk and reward are a function of a separate restaking market it does not itself control. Its EigenLayer dependency is why the two projects are tightly coupled in this directory — ether.fi is consistently among EigenLayer's largest single sources of restaked ETH.

ETHFI: the governance token

ETHFI is the ether.fi DAO's governance and coordination token, announced in March 2024. Key parameters from ether.fi's own announcement:

• Fixed supply: 1,000,000,000 ETHFI, with "no further issuance."
• Initial circulating supply: 115,200,000 ETHFI (11.52% of max supply) at launch.
• Airdrops: Season 1 distributed 6% of supply, claimable from 18 March 2024 over a 90-day window; Season 2 distributed a further 5% (snapshot 15 March 2024), with unclaimed Season 1 tokens rolling into Season 2. Whale wallets were subject to a 3-month vest.
• Full distribution is scheduled to complete by the end of 2030.

The announcement scopes what ETHFI actually decides: the Grants Program, "protocol longevity, vision, and key economic parameters, such as protocol fees," greenlighting of node operators and contributor permissions, and treasury-diversification activities. Holders can also stake ETHFI (receiving sETHFI) to earn incentives and unlock membership tiers via the staking docs.

How governance works

ether.fi's process is documented in the official governance resources:

• Discussion: proposals are posted on the Discourse forum "with context and discussion before and during the voting window."
• Voting: votes are cast on Snapshot (etherfi-dao.eth) with a 4-day window. A vote can be opened at the same time a proposal is submitted.
• Quorum & threshold: "1M ETHFI is required for quorum in order for a vote to be valid," and a proposal "passes if it receives at least 1M ETHFI in approval votes."
• Weight & delegation: voting power is proportional to ETHFI (and sETHFI) held; holders can delegate their voting power to others.

The Foundation-and-multisig model

ether.fi separates deciding from executing through the ether.fi Foundation. A Proposer "submits proposals for the protocol changes and governance decisions, including treasury spend, initiating community votes for token holder approval." A Multi-Sig Committee then "implements these decisions, handles emergency actions, and ensures proposals align with the Foundation's objectives."

This is a distinct archetype from the fully on-chain Governor-style DAOs elsewhere in this directory: the binding tally is an off-chain Snapshot vote, and a trusted multisig carries out the result. The Foundation states that "further governance mechanisms will be rolled out in phases," aiming toward "full decentralization with an ecosystem of active contributors" — a candid progressive-decentralization posture rather than a claim of already-trustless execution. That gap between an off-chain vote and a multisig that executes it is exactly the failure mode this wiki catalogues in how DAOs fail.

Governance in practice

Beyond parameter changes, the ether.fi treasury and its product surface (Stake, Liquid, and the Cash card) give holders real economic levers. Treasury-diversification and token-value questions — including proposals to deploy treasury toward ETHFI buybacks — have been brought to the DAO's Snapshot, exercising the "key economic parameters" and "treasury diversification" mandate the token was given. Because these are Foundation-executed multisig actions rather than trustless on-chain execution, they are a live test of the phased-decentralization promise above.

How Caper approaches this

ether.fi shows the standard shape of a large DeFi DAO: an off-chain Snapshot vote sets intent, and a Foundation multisig is trusted to carry it out. Caper narrows that trust gap in two places. First, vote weight is a product of what a member holds and how they have participated — so holdings still count, but a large bag alone cannot decide an outcome without the participation term. Second, a proposal's on-chain execution is bound to a settled, clamped winner, so what a multisig could do is constrained by what the ledger tallied — the off-chain result and the on-chain action cannot diverge. It is a different point on the same design axis ether.fi is walking down in phases.