Ether.fi cuts EigenLayer restaking ties following yield and risk concerns
CIE News ·
Ether.fi is eliminating its restaking integration with EigenLayer by the end of the quarter. Protocol documentation shows under 1% of assets remain restaked as weETH shifts to a standard liquid staking token.
Liquid restaking protocol ether.fi is severing its structural connection to EigenLayer by the end of the quarter, according to CoinDesk. Protocol documentation indicates that less than 1% of assets remained restaked as of August, with plans underway to remove EigenPod withdrawal credentials by year-end. In August, the project removed restaking functionality from its weETH token, effectively converting it into a standard liquid staking token.
Ether.fi chief executive Mike Silagadze told CoinDesk that the shift was motivated by absent yield incentives and security risks perceived by depositors. Users seeking restaking features are instead directed to opt into an alternative token operating on competitor platform Symbiotic. Restaking activity across decentralized finance has faced pressure from diminishing incentives, as protocol fee revenues remained low compared to traditional liquid staking.
Rising operational risks further reduced interest after slashing went live in April 2025, introducing capital penalties for misbehaving operators alongside expiring deposit point programs. According to CoinDesk, the liquid restaking sector's profitability has tightened, with the five largest remaining protocols posting $953,350 in combined gross profit in the second quarter of 2026, down from $2.18 million three quarters prior.