- weETH (Wrapped eETH) is ether.fi’s liquid restaking token, combining Ethereum staking rewards with EigenLayer restaking yields for a blended APY of roughly 4–8%.
- ether.fi manages nearly $10 billion in TVL, making it the second-largest liquid staking protocol on Ethereum behind Lido.
- weETH is composable across 50+ DeFi protocols — you can use it as collateral, provide liquidity, or farm yields while staking rewards accrue automatically.
- Unlike custodial alternatives, ether.fi lets users retain control of their validator keys — a critical differentiator from protocols like Lido.
Liquid restaking has emerged as one of Ethereum’s most compelling yield opportunities — and weETH sits at the center of it. Issued by ether.fi, weETH is the wrapped, transferable form of eETH, the protocol’s native liquid restaking token. Where traditional ETH staking earns around 3–4% APY, restaking through ether.fi layers EigenLayer rewards on top, targeting a blended 4–8% APY while keeping your ETH liquid and usable in DeFi. This guide breaks down exactly how weETH works, why it has attracted nearly $10 billion in deposits, and what risks you should understand before diving in.
What Is ether.fi and How Does It Work?
ether.fi is a decentralized, non-custodial liquid restaking protocol built on Ethereum. Launched in 2023, it quickly distinguished itself from earlier liquid staking solutions by natively integrating with EigenLayer — a middleware layer that allows staked ETH to simultaneously secure multiple external protocols (called Actively Validated Services, or AVSs), generating additional yield in the process.
The Staking Hierarchy
To understand weETH, it helps to see where it sits in Ethereum’s staking evolution:
- Traditional staking: Lock 32 ETH with a validator, earn ~3–4% APY. Capital is completely illiquid.
- Liquid staking (e.g., Lido stETH): Stake any amount, receive a tradeable token that represents your staked position. Earn ~3.5% APY after protocol fees.
- Liquid restaking (ether.fi eETH/weETH): Stake ETH through ether.fi, receive eETH, which is simultaneously restaked via EigenLayer to secure additional networks. Earn staking rewards plus restaking rewards.
eETH vs. weETH: What’s the Difference?
When you deposit ETH into ether.fi, you receive eETH — a rebasing token that automatically updates its balance daily to reflect accrued rewards. weETH is simply eETH wrapped into a non-rebasing format: instead of your balance changing, the exchange rate between weETH and eETH increases over time, making it more compatible with DeFi protocols that struggle with rebasing mechanics.
Both tokens represent the same underlying position. The choice between them is purely technical and depends on which format a particular DeFi protocol prefers.
ether.fi’s Non-Custodial Architecture
One of ether.fi’s most important features is its non-custodial design. In most liquid staking protocols, the protocol controls your validator keys — meaning you trust the protocol to act honestly with your deposited ETH. ether.fi takes a different approach: users generate their own validator keys using a purpose-built technology, and ether.fi operators never have unilateral access to withdraw your funds.
This design significantly reduces the custodial and counterparty risk that institutional and security-conscious users worry about with other protocols. It’s a key reason ether.fi has attracted institutional attention alongside retail depositors.
ETHFI Token and Governance
In early 2024, ether.fi launched the ETHFI governance token, distributing it through multiple airdrop seasons to early depositors. ETHFI holders participate in protocol governance — voting on fee structures, validator selection criteria, treasury management, and new EigenLayer AVS integrations.
As of early 2026, ETHFI has a circulating supply of approximately 1.08 billion tokens, with additional unlocks scheduled throughout 2026. The protocol has also discussed fee-sharing mechanisms for ETHFI stakers, though governance is still refining the exact parameters.
Current Metrics: Nearly $10B in TVL
ether.fi’s growth has been exceptional. From roughly $1.2 billion in TVL at the end of 2024, the protocol surpassed $9.9 billion in total value locked by early 2026, according to DeFiLlama. This makes it the second-largest liquid staking/restaking protocol on Ethereum, trailing only Lido’s $35+ billion dominance but growing at a significantly faster rate.
Key metrics as of March 2026:
- TVL: ~$9.9 billion
- weETH APY: approximately 4.5% (30-day average), with daily spikes up to 8–9% during high-demand periods via the Automated Rebalancing Module
- DeFi integrations: 50+ protocols including Aave, Uniswap, Curve, and Pendle
- ETHFI token price: approximately $1.82 (early 2026)
How to Use weETH in DeFi
weETH’s composability is its main value proposition beyond pure yield. Here’s how holders commonly deploy it:
Collateral on Lending Protocols
Protocols like Aave and Morpho accept weETH as collateral, allowing you to borrow USDC, ETH, or other assets against your restaking position. This lets you maintain ETH exposure and staking rewards while accessing liquidity.
Liquidity Provision
Liquidity pools on Curve and Uniswap allow weETH/ETH or weETH/stablecoin pairs, earning trading fees on top of restaking yields. Concentrated liquidity positions can meaningfully boost total returns, though they introduce impermanent loss risk.
Yield Trading on Pendle
Pendle Finance allows users to separate weETH’s principal from its future yield, enabling fixed-rate yield strategies or leveraged yield speculation — a sophisticated DeFi primitive that has proven popular with institutional-adjacent users.
Risks You Should Understand
weETH is not a simple savings account. Several risks deserve careful consideration:
- Dual slashing risk: Because your ETH secures both Ethereum validators and EigenLayer AVSs, poor behavior on either layer can result in slashing — partial loss of deposited ETH. ether.fi mitigates this by diversifying across multiple AVS operators.
- Smart contract risk: ether.fi’s contracts have been audited, but no smart contract is risk-free. Large deposits have historically been a target for exploits across DeFi.
- Liquidity risk: eETH and weETH have a withdrawal queue, meaning instant redemption is not always available during high-demand periods. The Automated Rebalancing Module helps manage this but does not eliminate it.
- EigenLayer ecosystem maturity: AVS rewards remain dynamic and dependent on which services are live and generating fees. Restaking yields could compress as the ecosystem matures and competition increases.
weETH vs. Competing Liquid Staking Tokens
| Feature | weETH (ether.fi) | stETH (Lido) | rETH (Rocket Pool) |
|---|---|---|---|
| Custodial Model | Non-custodial | Custodial | Decentralized |
| Restaking | Native EigenLayer | No | No |
| APY (approx.) | 4–8% | 3.5–4% | 3–4% |
| TVL (2026) | ~$9.9B | $35B+ | ~$4B |
Final Thoughts
weETH represents one of the most compelling yield opportunities in Ethereum’s ecosystem for users comfortable with DeFi risk. By combining base staking rewards with EigenLayer restaking yields, ether.fi delivers returns that simple liquid staking protocols cannot match — while its non-custodial architecture addresses a key concern for security-minded users.
With nearly $10 billion in TVL and integration across 50+ DeFi protocols, weETH has established itself as a core piece of Ethereum’s liquid staking landscape. That said, dual slashing risk, smart contract exposure, and the evolving nature of EigenLayer’s AVS ecosystem mean this is not a set-and-forget position. Understand the risks, size your position accordingly, and actively monitor the evolving restaking landscape before committing significant capital.