Ether.fi says it will end its last remaining structural connection to EigenLayer by the end of this quarter, closing out the restaking business that helped define the protocol. Its documentation says less than 1% of assets were still restaked as of August, and that the EigenPod withdrawal credentials tied to EigenLayer are scheduled to be removed by the fourth quarter of 2026.
The move follows an August change in which ether.fi stripped restaking from weETH, its widely used DeFi collateral token. Since then, weETH has functioned as a standard liquid staking token, while users who still want restaking exposure must opt into a separate product built on Symbiotic, a competing restaking platform.
Why ether.fi says it is leaving restaking
Chief executive Mike Silagadze told CoinDesk that ether.fi saw little reason to stay in the sector because meaningful yield opportunities had failed to emerge and some stakers viewed the product as carrying added risk. In that view, the risk-reward balance no longer justified keeping restaking at the center of the protocol.
The broader revenue picture cited by CoinDesk points in the same direction. DefiLlama data showed the restaking category held $10.02 billion on Sept. 8 but generated just $99,977 in fees over the prior week. By comparison, liquid staking held $51.87 billion and brought in $27.35 million, implying ordinary staking was earning roughly 53 times more per dollar secured. According to the report, the services using EigenLayer security never generated enough demand to support the extra yield that restaking had promised.
A sector hit by falling profits and rising risk
The pressure has not been limited to ether.fi. CoinDesk reported that the five largest remaining liquid restaking tokens after ether.fi's shift out of the category — Renzo, Kelp, Swell, Puffer Finance and Bedrock — posted combined gross profit of $953,350 in the second quarter of 2026, down from $2.18 million three quarters earlier. Puffer Finance, despite having raised $23 million, made only $21,590 in that quarter.
Several changes appear to have weakened the model further. Deposit-boosting points programmes wound down through 2025, removing a subsidy that had helped attract capital. EigenLayer then activated slashing in April 2025, introducing real penalties for restaking without a corresponding rise in yield.
Risk concerns also intensified this year. In April, an attacker exploited Kelp's cross-chain bridge to mint roughly $293 million in unbacked rsETH and borrow actual ether against it on Aave, highlighting the additional risks associated with token wrappers layered on top of restaking.
Ether.fi shifts toward neobank-style services
As it steps away from restaking, ether.fi has been repositioning itself as a crypto neobank. The company has expanded around a payment card that lets users spend against holdings, alongside a borrowing market and a suite of vault products.
Silagadze said neobank revenue had fully replaced the income lost from restaking and a lower ether price. He added that ether.fi was on track to increase its revenue run rate by about 38% this year. Internally, card fees have become a much larger contributor, rising from 17% of monthly revenue in January to 46% in July.
Outside data paints a more mixed picture. CoinDesk, citing DefiLlama figures, reported that ether.fi's gross profit fell 47% from $18.71 million in the third quarter of 2025 to $9.99 million in the second quarter of 2026. It also said restaking remained ether.fi's second most profitable business line at $2.87 million when the decision to exit was made. Ether.fi has not published the basis for the 38% growth figure mentioned by Silagadze.
What changes next for users and the market
For users, the immediate practical change is that weETH no longer carries built-in restaking exposure, and any remaining connection to EigenLayer is due to be removed by the end of this quarter. Those seeking restaking must now opt into a separate product on Symbiotic rather than receiving that exposure through ether.fi's main token structure.
The decision also lands as EigenLayer itself broadens its pitch. The project has rebranded as EigenCloud and is now marketing verifiable computing, with restaked collateral serving as the underlying layer. Its holdings stand at $5.10 billion, down sharply from $22.06 billion in August 2025, underlining how much the market has contracted even as the platform looks beyond its original restaking narrative.
Source: www.blockhead.co