As a seasoned researcher with years of experience diving into the intricacies of decentralized finance (DeFi), I find the recent proposal by Ether.Fi particularly interesting. The idea of using protocol revenues to buy back native tokens and distribute them to stakers is not new, but it’s always refreshing to see innovation in this space.
In simpler terms, the decentralized finance (DeFi) platform known as Ether.Fi has suggested using some of its earnings to purchase back its own ETHFI tokens and then distribute these tokens to the token stakers, as outlined in a post on Ether.Fi’s community discussion board.
As a crypto investor, I’m excited about Ether.Fi’s recent proposition: they plan to allocate 5% of their protocol earnings towards purchasing ETHFI tokens. These tokens will then be distributed among us, the ETHFI stakers, as a reward. This move is designed to boost the value and usefulness of ETHFI, fortify its market, and ensure that our interests are aligned with the growth of the Ether.Fi ecosystem.
According to the Ether.Fi team, the 5% revenue distribution is considered an initial or starting point, implying potential changes in the future. At present, reward eligibility is restricted to token holders who have locked up their ETHFI for a minimum of one month.
The decision on the proposal will be made by the close of this week, after a tokenholder vote, as stated in the post. As per the current setup, Ether.Fi employs its protocol earnings to repurchase tokens from the main liquidity pool of ETHFI.
Liquid restaking tokens
Ether.Fi, a type of system that automatically re-distributes staked tokens, ranks as the 4th most widely used decentralized finance (DeFi) platform, holding approximately $10 billion in combined value that’s been locked within it, based on DefiLlama’s data.
Restaking refers to the process of utilizing a token that has previously been pledged as collateral with a validator, earning rewards, and then employing this same token to support multiple other protocols concurrently.
Liquid restaking tokens (LRTs) represent a tradable claim on a pool of restaked assets.
From its debut in 2023, Ether.Fi has amassed a total income of approximately $60 million, primarily from fees and additional income streams, as reported by DefiLlama.
The total value locked (TVL) in Decentralized Finance (DeFi) is nearing its record highs from 2021, partially thanks to the rising appeal of restaking and Layer-1 solutions like LRT protocols.
EigenLayer stands out as the leading staking protocol, boasting a TVL (Total Value Locked) of approximately $18.5 billion. Ether.Fi is a competitor in the realm of Layer 2 Rollup technologies, such as Renzo and Kelp.
The total value locked (TVL) in Ether across the top 5 decentralized finance platforms, according to Kairos Research, is approximately 3.38 million Ether, which translates to roughly 12.5 billion US dollars as of their December report.
Decentralized Finance (DeFi) platforms are facing growing demands to distribute a portion of their earnings to token holders. For instance, initiatives such as Ethena, Sky (originally known as Maker), and Aave are experimenting with methods to apportion value from the revenues generated by their native tokens.
On November 15th, the stablecoin issuer Ethena consented to distribute a section of its approximately $200 million in earnings from its protocol among its token holders.
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2024-12-16 23:56