Liquid restaking protocol ether.fi, has announced a $23 million funding round, led by Bullish Capital and CoinFund.
Bullish Capital is the venture capital arm in the Bullish group of companies, which in turn is a subsidiary of Cayman Finance member B1.
Cayman Islands-based ether.fi has established itself as a leader in liquid restaking with more than $1.6 billion in total value locked (TVL) – up 15x since the beginning of 2024 – and approximately 71,000 unique wallets holding its restaking token, eETH.
The Series A funding round also includes commitments from notable investors such as OKX Ventures, Foresight Ventures, Consensys, Amber, Selini, Draper Dragon and Bankless Ventures as well as the founders/executives of Aave, Polygon, Kraken, Curve, Ethena and DeFi Llama.
"ether.fi has seen remarkable growth and we are thrilled to welcome the backing of leading crypto investors to support our continued expansion," said Mike Silagadze, CEO and co-founder of ether.fi said in press release. "The funding round further cements ether.fi not only as the first and largest liquid restaking protocol, but the most trusted as the only protocol to allow redemptions and not just speculative one-way deposits."
In the wake of the Bitcoin ETF launch, global market participants are shifting their focus to the Ethereum ecosystem, where smart contracts power decentralised finance (DeFi) and its transition to proof of stake delivers staking and restaking rewards to those who participate. ether.fi said it is the next innovation and generation of this momentum.
Alasdair Foster, president of Bullish Capital, said restaking has the potential to solve the cold start challenge new projects face by leveraging the existing strength of the Ethereum validator set and becoming a central part of digital asset infrastructure for the long term. "ether.fi has pioneered how to do this in a capital efficient manner through liquid restaking, and we are excited to partner with them on further developing this innovative technology."
Restaking allows users to earn additional rewards on their staked ETH. However, existing options for restaked ETH have been illiquid to date, requiring users to invest purely on speculation.
ether.fi allows users to stake native ETH, which is automatically restaked on the Eigenlayer protocol, in return for eETH, a liquid token that can participate and earn additional rewards in other DeFi protocols on Ethereum and compatible L2s.
ether.fi is the first liquid restaking protocol to offer rewards on Eigenlayer through native restaking, the company said. As a result, ether.fi is a meaningful contributor to the significant momentum and growth in the broader Eigenlayer ecosystem, which jumped to $7 billion in TVL in February 2024, up from $250 million in December 2023.
Alex Felix, Chief Investment Officer of CoinFund, said: "ether.fi is the future of crypto asset management. As an on-chain DeFi solution, the protocol bridges the realm of what is technologically helpful to Ethereum's protocol decentralisation and an opportunity to maximise value for holders of ETH. With enhanced, next-gen earning potential comes complexity and slashing risks that will require a sophisticated risk management solution. CoinFund is thrilled to partner with Mike and his dedicated, ambitious team to deliver these transformative benefits."
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