Key points

• Ether.fi will remove the last structural link between its staking tokens and EigenLayer this quarter, with under 1% of assets still restaked as of August.
• Restaking secured $10.02 billion on Sept. 8 but generated just $99,977 in weekly fees, versus $27.35 million for liquid staking on $51.87 billion.
• Renzo, Kelp, Swell, Puffer Finance and Bedrock made $953,350 in combined gross profit in the second quarter of 2026, down from $2.18 million three quarters earlier.
• An April 18 exploit of Kelp's cross-chain bridge created 116,500 rsETH worth about $293 million, triggering roughly $6 billion of outflows from Aave.
• Ether.fi now describes itself as a crypto neobank; card fees produced $3.14 million of gross profit in the second quarter.

Ether.fi is walking away from restaking, the business it was built on, after yields dried up and the risks of the trade became real. CoinDesk reports that the protocol will sever its last structural tie to EigenLayer this quarter, leaving under 1% of assets restaked, with EigenPod withdrawal credentials due to be removed by the end of the year.

Chief executive Mike Silagadze told CoinDesk the exit came down to risk rather than technology. There were no meaningful yield opportunities left in restaking and stakers perceived risk, so the company decided it made sense to leave. When ether.fi launched in 2024, deposits were restaked on EigenLayer automatically; in August it stripped restaking out of weETH, its circulating token, leaving it a plain liquid staking token. Users who still want restaking must opt into a separate token built on rival platform Symbiotic.

Ether.fi cuts EigenLayer link

Restaking was meant to let the same locked ETH do a second job. EigenLayer would rent that security to services such as oracles and data availability layers, which would pay for protection, so depositors earned twice on one pot of money. Liquid restaking tokens sat on top as tradable receipts. EigenLayer held $19.7 billion at its peak and liquid restaking tokens grew more than 1,000% in the first six weeks of 2024, but the services buying security never paid enough to cover the base staking yield plus a premium.

The numbers now are stark. On Sept. 8, DefiLlama's restaking category held $10.02 billion and generated $99,977 in fees over the prior week, while liquid staking generated $27.35 million on $51.87 billion. Per dollar secured, ordinary staking earns roughly 53 times more. Points programmes subsidising deposits wound down through 2025, and slashing went live in April 2025, giving restaking a priced downside with no extra yield to compensate.

Fees fail to cover risk

Set ether.fi aside and the sector is small. Renzo, Kelp, Swell, Puffer Finance and Bedrock, the five largest remaining liquid restaking tokens, made $953,350 in combined gross profit in the second quarter of 2026, down from $2.18 million three quarters earlier. Puffer, which raised $23 million, recorded $21,590 for the quarter and Swell $22,370. On Kelp's books, EIGEN token rewards appear as equal revenue and cost of revenue, passing straight to depositors, so profit came from ordinary staking fees underneath.

On April 18, an attacker exploited Kelp's cross-chain bridge and created 116,500 rsETH in 46 minutes, worth about $293 million, with no ETH backing it. The tokens were deposited into Aave as collateral and real ether borrowed against them; around $6 billion left Aave in the following days, with potential bad debt of $123 million to $230 million. Silagadze disputes reading the incident as a leverage failure, attributing it to poor cross-chain security practices, and says ether.fi's Aave market has conservative parameters.

A neobank instead

Ether.fi's answer was to stop being a staking company. It now runs a card that lets users spend against crypto without selling, a borrowing market on Optimism and a set of vaults, and calls itself a crypto neobank. Card revenue rose from 17% of monthly revenue in January to 46% in July, and Silagadze says neobank revenue has fully replaced what was lost from restaking. DefiLlama's figures show ether.fi's gross profit falling 47% to $9.99 million in the second quarter of 2026, and restaking was still its second most profitable line when it decided to leave.

EigenLayer itself did not fail. Its EigenDA service runs on mainnet at 100 MB/s and remains the largest by value secured, and Symbiotic has integrated more than 50 networks. Rebranded as EigenCloud, the company now markets verifiable computing, with restaked collateral underneath rather than as the product on sale, and its holdings stand at $5.10 billion, down from $22.06 billion in August 2025. What remains unsettled is whether a market that shrank roughly 75% while securing everything it secured before has failed, or was simply four times larger than the work required.

Read the full article on CoinDesk →