Ethereum
Ether.fi exits restaking, converts weETH to pure liquid staking token
Liquid restaking platform Ether.fi has removed all yield-farming exposure from weETH and repositioned it as a straightforward staking token to reduce compounded risks.
Ether.fi announced on August 7th that it has stripped all restaking functionality from weETH, transforming the token into a pure liquid staking product. The platform moved its restaking activities to new weETH implementations on Symbiotic and exited Eigen Layer entirely, citing the goal of eliminating what it termed "bundled risk."
The shift reflects mounting concerns about the safety of liquid restaking strategies, which layer additional yield-generation mechanisms on top of staked ETH. These nested approaches have become vulnerable to DeFi exploits, exemplified by the $292 million KelpDAO hack. Aave's recent decision to remove over $98 million in risky assets with limited adoption has further pressured the restaking ecosystem.
The broader liquid restaking market has contracted sharply despite strong demand for basic ETH staking. Total value locked in the sector fell from $29 billion to $22 billion since October, though Ether.fi remains the dominant player with approximately $11.4 billion. CEO Mike Silagadze framed the rollback as a market recalibration, stating that restaking may return "in one form or another" but arrived prematurely.
Analysts noted that Ether.fi and Eigen Layer pioneered the high-leverage ETH looping strategies on Aave, including Pendle PT trades that offered 50 to 100 basis points above base staking returns. Aave's recent clean-up deprecating these trades affected both platforms indirectly, signaling potential ripple effects across the broader DeFi ecosystem.
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