Ether.Fi, a decentralized finance (DeFi) protocol, has proposed a plan to use a portion of its revenues to buy back its native token, ETHFI. The goal of this initiative is to reward stakers and align their interests with the growth of the Ether.Fi ecosystem.
Ether.Fi has proposed a buyback program for ETHFI stakers, aiming to enhance the token's market value and foster community ownership and participation. The proposal suggests allocating 5% of the protocol's revenue to purchase ETHFI, which would then be distributed to stakers who have held their tokens for at least one month. The Ether.Fi team considers this allocation to be a preliminary measure and may adjust it in the future based on the protocol's performance and community feedback.
The decision on this proposal will be made by the end of the week through a vote among tokenholders. Ether.Fi has already been using its revenues to buy back tokens from its primary liquidity pool, demonstrating its commitment to enhancing the value of ETHFI and incentivizing long-term holding.
Ether.Fi has become a significant player in the DeFi space, ranking as the fourth most popular protocol with nearly $10 billion in total value locked (TVL). This growth can be attributed to the increasing popularity of liquid restaking, which allows users to stake their tokens as collateral with a validator while also securing other protocols. Liquid restaking tokens (LRTs) provide users with additional liquidity and flexibility.
In the evolving DeFi space, protocols are under pressure to share revenues with tokenholders. This trend is evident in projects like Ethena, Sky (formerly Maker), and Aave, which are piloting mechanisms to ensure value accrual for their native tokens.
The success of buyback initiatives, such as the one proposed by Ether.Fi, will play a crucial role in determining the long-term viability and attractiveness of various protocols as the DeFi sector continues to mature.