In the fast-paced world of decentralized finance (DeFi), projects like Ether.Fi are pushing boundaries by blending traditional banking concepts with blockchain innovation. A recent thread from Shaunda Devens, an analyst at Blockworks Research, shines a light on Ether.Fi's impressive journey. Starting as a liquid restaking token (LRT) powerhouse, it's now evolving into what Devens calls "the crypto neobank." Let's unpack this thread and explore what it means for crypto enthusiasts and meme token traders alike, as these DeFi shifts often spark viral trends and community-driven tokens.

Dominating the LRT Landscape

Ether.Fi burst onto the scene in 2023, capturing a whopping 80% market share in LRTs with about 2.9 million ETH locked in, equaling roughly $11.7 billion in total value locked (TVL). For those new to the term, LRTs are like supercharged staking assets on Ethereum. You stake your ETH, get a liquid token in return (like eETH), and that token can be used elsewhere in DeFi while still earning rewards.

What set Ether.Fi apart? Key upgrades like Ethereum's Shanghai hard fork, which allowed ETH withdrawals, and the rise of EigenLayer for restaking. Restaking lets your staked ETH earn extra yields by securing other networks. This combo, plus Ether.Fi's own incentives, fueled massive growth—peaking at over 860,000 ETH deposited in a single month.

But hype can fade. As Devens notes, many LRTs crashed after their token launches because the "points" systems—rewards programs to bootstrap liquidity—lost steam. Ether.Fi bucked the trend thanks to strong integrations with platforms like Pendle (for yield trading) and Aave (for lending). While competitors' TVL plummeted, Ether.Fi's held steady.

The Pivot to Crypto Neobanking

With staking growth slowing and margins thin (around 10% on a 2.7% annual percentage yield, or APY), Ether.Fi didn't rest on its laurels. It expanded into "Cash" and "Vaults" products, aiming to create a seamless crypto banking experience. Imagine using your on-chain assets to spend in the real world without selling them—that's the vision.

The Cash card, launched recently, lets users borrow against their crypto holdings for everyday purchases. In just nine months, it's issued over 11,000 cards, processing $38 million across 410,000 transactions. Average spend? About $93 per transaction. This isn't just convenient; it's revenue-generating, pulling in $2.1 million year-to-date (YTD) through September 15, 2025.

Complementing Cash are the Vaults—automated strategies where you deposit assets like wrapped eETH (weETH), stablecoins, or even Bitcoin to earn yields while keeping them spendable via the card. Yields here are juicy, around 11%, compared to 4% at traditional neobanks. Plus, the borrowing cost on the card (about 4%) can be offset by these earnings, making it effectively free or even profitable.

Vaults have raked in $4.26 million YTD, though fees were temporarily lowered in Q3 2025 to boost adoption. This smart move keeps funds looping back into the ecosystem, enhancing stickiness.

Revenue Breakdown and Future Outlook

Diving into the numbers, Ether.Fi's total revenue hit $29.7 million YTD. Staking leads at 73% ($21.7 million), followed by Vaults (14%), Cash (7%), and smaller streams like withdrawals (5%). On a Q3 run-rate, Cash is climbing to 14%, showing the pivot's success.

Valuation-wise, Ether.Fi trades at about 24x price-to-sales (P/S), similar to other liquid staking tokens (LSTs). But as Cash and Vaults scale—with better margins than pure staking—the business mix could improve, potentially boosting the $ETHFI token's appeal. In the meme token world, where hype drives prices, this real utility could inspire community memes and derivatives, turning Ether.Fi into a cultural phenomenon.

Devens wraps up by teasing deeper insights in the full Blockworks Research report, covering growth projections, token unlocks, and buybacks. If you're into DeFi or scouting the next big meme-inspired token play, keep an eye on Ether.Fi—it's bridging crypto's wild side with practical banking.

For more on emerging trends in blockchain and meme tokens, check out our knowledge base at Meme Insider. Follow the original thread on X for the full details.