TBW - EtherFi : What is the relevance of the DeFi neobank business model?
EtherFi is clearly stating its intentions: to build a bank designed natively for decentralised finance. Behind this formula, a central question arises: what exactly does this ambition encompass, and what are the concrete steps to achieve it? To understand EtherFi's positioning, we need to look at its business model, its growth strategy and its place in the current ecosystem.
A platform at the heart of restaking on Ethereum
EtherFi has established itself as a key platform in the world of liquid restaking on Ethereum. Its service allows users to store their ETH while receiving a liquid derivative, the eETH, which they can then mobilise in DeFi, whether to borrow, exchange or provide liquidity. The protocol thus combines the returns of traditional staking with those offered by restaking via EigenLayer.
With more than 2.5 million ETHs deposited, representing around $6.8 billion to date, EtherFi is among the leading DeFi platforms in operation. It ranks fourth in terms of total locked value (TVL), an indicator closely followed in the sector.
The project stands out for its non-custodial approach - users retain control of their funds - and for a growth strategy based on a points and airdrop system (its ETHFI token) implemented during 2024.
From now on, EtherFi is claiming a broader ambition: to become a native decentralised bank, with the aim of making eETH a structuring asset in the crypto economy. It remains to be seen how this ambition translates into reality.
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A three-pillar business model
EtherFi has gradually extended its scope. Initially focused on ETH restaking, the protocol now articulates its business model around three distinct pillars: Stake, Liquid and Cash. Each pillar contributes to its expansion strategy and revenue diversification.
Stake: the basis of the model
The first revenue lever is based on staking. EtherFi takes a commission on the returns generated by assets staked via its platform. These revenues include several components: rewards from Ethereum's Proof-of-Stake, restaking incentives via EigenLayer, participation in Distributed Validator Technology (DVT), as well as returns generated by certain real-world assets (RWAs).
Each source is correlated to the nature of the asset, market conditions and the total value locked in. Based on internal estimates, this activity is expected to account for approximately $26 million in revenue in 2025 in the project's central scenario.
Liquid: yield-optimised products
The second pillar, called Liquid, is based on the logic of yield-optimised vaults. These products allow EtherFi to charge management fees (between 1.25% and 2%) while offering users exposure to different assets: ETH, BTC and USD. Revenues come from these fees but also from strategic partnerships and yield-sharing agreements with other players in the ecosystem.
According to the company, Liquid vaults offer on average a yield per dollar invested 2.5 to 3 times higher than traditional staking. EtherFi estimates that this range could generate around $28 million in revenue over the year 2025.
Cash: the banking brick of the whole
The third pillar is the central element of EtherFi's ambition to become a decentralised bank. Under the name "Cash", the protocol brings together a series of financial services combining DeFi and more traditional infrastructures.
This includes a payment card backed by stablecoins (956 cards already active), fiat ramps in USD and EUR (via SWIFT, ACH and IBAN), decentralised credit products based on Aave, and a custody-free smart contract that eliminates gas charges, including in multichain. These solutions are designed for both consumer and professional use.
The revenue generated comes from a variety of activities: card payments, foreign exchange transactions, swaps, loans, or even commissions on partner services (such as travel bookings). Added to this are the spreads received on deployments on Aave. By the end of 2025, this Cash brick could generate around $4 million in revenue.
More than an isolated product, Cash is designed as a growth driver for the entire EtherFi ecosystem. Users can hold their funds in LiquidETH or LiquidUSD and use them directly for payments or loans. This cross-integration fuels a circular dynamic: the growth of Cash drives the growth of deposits in Liquid vaults, and vice versa. To date, 25 million dollars have been deposited, including 19.5 million in LiquidETH and 3.5 million in LiquidUSD.
A multi-audience positioning
To support its growth, EtherFi is targeting three very distinct user segments. The first is made up of native DeFi users looking for sovereign alternatives. The second is made up of customers of centralised platforms, used to yield products but attracted by greater transparency and a non-custodial model. Finally, the third segment targets users of neobanks, whom the protocol hopes to capture thanks to a fluid user experience coupled with the advantages of Web3: direct custody of funds, international payments, and higher returns than the traditional banking sector.
With these three pillars, EtherFi seeks to build a coherent offering that combines yield, utility and integration with the Ethereum ecosystem, while adopting a broader positioning than that of a simple restaking protocol.
A truly relevant DeFi bank?
The "bank" qualifier used by EtherFi deserves to be qualified. Unlike traditional financial institutions, the platform does not have a banking licence. It operates as a technology company developing infrastructure services for decentralised finance. The company itself makes it clear that the functions offered under the "DeFiBank" label are provided by a fintech, not a regulated entity.
"We are already in the process of applying for several licences, both in Europe and North America", explained CEO Mike Silagadze to The Big Whale at the end of April. "We are also working with regulated partners, particularly for credit card issuance. As far as Europe is concerned, we don't think we need a MiCA licence as we are not custodial. But we are looking closely at the possibility of obtaining an EMI (Electronic Money Institution) licence as well as a VASP (Virtual Asset Service Provider) licence. This process is still ongoing."
The crypto card, which is a key element of this strategy, is not new in itself. In recent years, several offerings have emerged in the CeFi universe, such as Crypto.com or Binance. They experienced a real craze, before marking time. Some have even been withdrawn from certain markets, such as the Binance card in France, under pressure from regulators.
In this context, the arrival of DeFi players in this field is not surprising. Gnosis Pay is one of the most visible examples: the volume of payments made via its card has been growing steadily for a year, according to data available on Dune.
The project shares with EtherFi a similar ambition: to offer a crypto card connected to a broader offering - cashback, loans, multi-currency services - while maintaining a decentralised architecture. Both are primarily targeting Europe, with a pitch focused on user sovereignty and the disintermediation of banking services.
This strategy is part of an underlying dynamic. The neobanking market is expanding rapidly: valued at $148 billion in 2024, it could reach $4,400 billion by 2034 according to some projections, representing annual growth of 40%.
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At the same time, the sector's revenues are expected to follow the same trajectory, rising from $83 billion in 2023 to more than $2,000 billion by 2030. Neobanks are seeing a sharp increase in their customer bases: between 2023 and 2024, the number of individual users grew by more than 30%, and the business segment by 40-60%, with some up to 20,000 businesses joining every month.
In this changing landscape, EtherFi's approach with its Cash product aims to capture some of this demand, combining the user experience of neobanks with DeFi's own features: self safekeeping of funds, superior returns, stablecoin payments and multichain compatibility. The record volume of stablecoin payments in 2024 - more than $15.6 trillion, over and above those processed by Visa - underlines the acceleration of this transition and the place that players like EtherFi could take in it.
What dynamics for the ETHFI token?
The EtherFi token has rallied strongly since mid-April, in the wake of market improvement and recent protocol announcements. Since its low point, its valuation has risen by 250%, outperforming other tokens in the sector: EigenLayer (+132%), AAVE (+135%) and LDO (+47%). This performance reflects the market's growing confidence in EtherFi's roadmap, and is accompanied by a significant increase in the number of tokens staked.
To date, the $ETHFI's role has been mainly focused on governance. However, it already benefits from a regular buyback mechanism operated by the foundation, financed by the income generated via the platform's three pillars: Stake, Liquid and Cash. This mechanism establishes a more direct relationship between EtherFi's economic development and the value of its token.
A staked version of the token, called sETHFI, captures part of this value. Up to 25% of the protocol's revenues can be used to buy $ETHFI on the market, before being redistributed to sETHFI holders. Currently, the token has an annual return of around 33%, while offering additional benefits: early access to certain products, enhanced rewards, or even privileged roles within the ecosystem.
While the token's function is not changing fundamentally, its valuation rationale is. The $ETHFI is gradually becoming an asset exposed to the real performance of the protocol, according to a logic that is close to - but not identical to - that of a dividend-paying security. This direction could strengthen its appeal as EtherFi's revenues grow and its products gain adoption.
The Big Whale's analysis
It remains to be seen whether EtherFi's strategy will deliver in the long term. One thing is certain: the project is part of a growing sector, where demand for alternative, more transparent and flexible financial services is not waning. The rapid development of crypto cards in recent years is a case in point.
EtherFi's model is no longer limited to ETH restaking. It is expanding to include a wider range of on-chain financial products: staking, yield vaults, payments, credit and multi-currency services. This diversification aims to build a coherent offering, capable of meeting the needs of a crypto-native audience looking for autonomy and concrete utility.
The central question remains that of adoption by a wider audience. If EtherFi manages to offer a fluid user experience while retaining the principles of DeFi - self-guarding, transparency, interoperability - it could fill a gap between CeFi platforms and traditional banking services.
In short, the protocol attempts to bridge the gap between the technical infrastructure of Web3 and the everyday uses of personal finance. A demanding positioning, but consistent with industry trends.
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Disclaimer: The author of this analysis holds $ETHFI tokens
