DeFi

TVL of Ether.fi Increases by $1 Billion in Just 5 Days

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Web3 Station

— 3 min read
TVL of Ether.fi Increases by $1 Billion in Just 5 Days

The Total Value Locked (TVL) in the liquid restaking solution ether.fi has surged by $1 billion since news broke that Ethereum ETFs are likely to be approved.

TVL of Ether.fi Increases by $1 Billion in Just 5 Days

Ether.fi, a leading liquid restaking solution in the Ethereum ecosystem, has strengthened its position by attracting an additional $1 billion in TVL over the past five days.

According to DefiLlama, from May 20 to May 25, the TVL on ether.fi increased from $4.5 billion to $5.6 billion, a rise of more than 24%. This marks the highest TVL ever recorded for ether.fi.


TVL fluctuations of ether.fi. Source: DefiLlama (25/05/2024)

Other liquid restaking protocols have also seen significant TVL increases in recent days, with growth rates around 20%, bringing the total TVL in the liquid restaking sector to $13.8 billion.


Top liquid restaking protocols. Source: DefiLlama (25/05/2024)

This period coincided with a dramatic shift in the outlook for Ethereum ETFs, moving from likely rejection by the SEC to approval of eight proposals from major Wall Street firms on the morning of May 24, as reported by Coin68.

The price of ETH has also significantly recovered from $3,100 to around $3,800, further explaining the TVL surge in the protocol.

However, CoinDesk's data shows that in the past 10 days, around 270,000 ETH, valued at $995 million, has been deposited into ether.fi to earn interest from the project. This includes an ETH staking yield of 3.48% per annum and a 15.1% yield from other flexible token locking products.

The price of ether.fi’s ETHFI token has also grown by more than 50% this week, reflecting investor optimism about the liquid restaking protocol's prospects.


4-hour chart of ETHFI/USDT on Binance at 11:15 AM on 25/05/2024

In an interview with CoinDesk, ether.fi CEO Mike Silagadze stated that it's "only a matter of time" before Ethereum ETFs start staking/restaking ETH and providing additional value to fund shareholders. To avoid being classified as securities from staking activities, Silagadze suggested that ETFs could run their own Ethereum nodes but would have to comply with US regulations and transaction censorship.

Nevertheless, the introduction of Ethereum ETFs is a positive signal, helping to attract more investors to Ethereum and the innovations it brings through smart contract applications.

Previously, to gain preliminary SEC approval, some Ethereum ETFs had to remove staking ETH proposals from their registration filings to avoid being classified as securities.

Key Highlights:

  • TVL Increase: Ether.fi's TVL surged by $1 billion in just five days, reaching $5.6 billion.
  • Sector Growth: Liquid restaking protocols saw TVL increase to $13.8 billion.
  • Ethereum ETF Impact: Approval of Ethereum ETF proposals likely drove the surge in TVL.
  • ETH Price Recovery: ETH price increased from $3,100 to $3,800.
  • Interest Yields: 270,000 ETH deposited into ether.fi, offering staking yields of 3.48% and flexible token yields of 15.1%.
  • ETHFI Token Growth: ETHFI token price grew by over 50% this week.
  • ETF Staking Potential: CEO Mike Silagadze expects Ethereum ETFs to start staking ETH, providing additional value to shareholders.

These developments underscore the growing interest and investment in liquid restaking solutions and the broader Ethereum ecosystem, driven by regulatory advancements and market optimism.

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