Ether.fi will sever its last structural tie to EigenLayer by the end of the current quarter, leaving under 1% of its assets in restaking, CEO Mike Silagadze confirmed. "There were no meaningful yield opportunities in restaking and there was some perceived risk from stakers, so we decided it made sense to exit," he told CoinDesk.

The decision caps a twelve-month collapse in liquid restaking economics. On Sept. 8, the restaking category on DefiLlama held $10.02 billion in deposits and generated $99,977 in fees over the prior week. Plain liquid staking, by contrast, secured $51.87 billion and produced $27.35 million in fees over the same period, a yield gap of roughly 53 times per dollar locked.

What changed for restaking?

Two policy and protocol shifts removed what margin the segment still had. Points programs subsidizing deposits wound down through 2025, and Ethereum's slashing mechanism went live in April 2025. Slashing confiscates part of an operator's staked ETH for misbehavior, including going offline or signing conflicting messages, exposing the wrapper layer to a real, priced downside for the first time. With no additional yield to compensate, depositors pulled back.

Ether.fi's weETH token automatically routed deposits through EigenLayer when it launched in 2024. In August the protocol stripped restaking out of weETH — the receipt that circulates as collateral across DeFi — leaving it as a plain liquid staking token. Users seeking restaking yields now have to opt into a separate token built on Symbiotic, a competing marketplace. EigenPod withdrawal credentials will be removed by year-end.

How thin are the surviving protocols?

Strip ether.fi out and the rest of the sector is barely profitable. Renzo, Kelp, Swell, Puffer Finance and Bedrock, the five largest remaining liquid restaking tokens, booked $953,350 in combined gross profit in the second quarter of 2026. Three quarters earlier the same five recorded $2.18 million. Puffer, which raised $23 million from investors, generated $21,590 for the quarter. Swell recorded $22,370.

The income statements show where the margin came from. On Kelp's books, EIGEN token rewards appear at $460,600 in both gross revenue and cost of revenue, passing straight through to depositors. Puffer and Swell book staking rewards the same way. Whatever profit these companies produced came from ordinary staking fees charged below the restaking layer.

What did the Kelp hack expose?

On April 18, an attacker exploited Kelp's cross-chain bridge and minted 116,500 rsETH worth about $293 million in 46 minutes with no ETH backing it. The attacker posted the unbacked tokens to Aave as collateral and borrowed real ether against them. Roughly $6 billion left Aave in the following days, with $123 million to $230 million in potential bad debt. In May, Aave rewrote its collateral listing standards to evaluate cybersecurity and technical architecture alongside price volatility.

Silagadze disputed the framing that leverage caused the loss. "The cause of the Kelp hack was poor security practices with respect to cross-chain, not related to leverage," he said. "The ether.fi Aave market has very conservative parameters and we have a strong commitment to security."

EigenLayer itself did not fail. Nothing was slashed and no restaking mechanism broke. The weak point was the bridge, but that is what made the incident damaging for liquid restaking wrappers. By April, holders of these tradeable receipts were accepting an extra piece of attackable software for no extra yield.

What is ether.fi building instead?

Ether.fi now operates a card letting users spend against crypto collateral without selling it, a borrowing market on the Optimism layer-2 network, and a set of vaults. The company describes itself as a crypto neobank. In August it added tokenized stocks, metals and fiat rails. Card revenue rose from 17% of monthly income in January to 46% in July.

"Neobank revenue has fully replaced the revenue lost from restaking and lower ETH price," Silagadze said. "We are on track to increase revenue overall run rate this year by about 38%, while staking and restaking revenue has declined by 70%."

DefiLlama's figures tell a different story. 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. The figures can coexist — gross revenue differs from gross profit and a forward run rate differs from a trailing quarter — but ether.fi has not published the basis for its 38% claim.

Card fees produced $3.14 million of gross profit in the second quarter. EigenLayer restaking produced $2.87 million for the protocol in the same period, ahead of core ETH staking, vaults, borrowing and management fees combined. On DefiLlama's accounting, restaking was ether.fi's second most profitable line at the moment it chose to leave.

What happens to EigenLayer?

EigenLayer has rebranded as EigenCloud and now markets verifiable computing — applications proving that off-chain work was carried out correctly — with restaked collateral sitting underneath rather than the product itself. Holdings fell to $5.10 billion from $22.06 billion in August 2025.

Symbiotic, where ether.fi moved its own restaking, has integrated more than 50 networks. EigenDA, EigenLayer's data availability service, still runs at 100 MB/s on mainnet. The remaining restaking services continue to operate, and the deadline for removing EigenPod credentials at ether.fi falls at year-end, after which the break between the protocol and the restaking thesis it once anchored becomes final.