Lido vs ether.fi: Key Differences Explained
Lido vs ether.fi compared: liquid staking vs liquid restaking, stETH vs eETH, governance tokens, supply design and the risks each adds on top of ETH staking.
Lido and ether.fi both let you stake ETH and receive a tradable token in return, but Lido is a liquid staking protocol (your ETH secures Ethereum and you receive stETH), while ether.fi is a liquid restaking protocol (your staked ETH is also restaked to secure additional services and you receive eETH or weETH). Restaking aims for extra rewards in exchange for an extra layer of risk.
Both protocols have governance tokens, LDO and ETHFI, which are separate from the staking tokens and often confused with them. This comparison explains how each protocol works, what each token does and what risks you take on, without recommending either.
Side-by-Side Comparison
| Lido | ether.fi | |
|---|---|---|
| Purpose | Liquid staking of ETH | Liquid restaking of ETH |
| Launched | 2020 | Governance token launched 2024 |
| What you receive | stETH (rebasing) or wstETH (wrapped) | eETH (rebasing) or weETH (wrapped) |
| Where rewards come from | Ethereum staking rewards | Ethereum staking plus restaking rewards and incentives |
| Validator operators | Node operators approved through Lido governance, plus modules aimed at wider participation | Node operators through ether.fi's own system, with emphasis on non-custodial design |
| Governance token | LDO | ETHFI |
| Token supply design | Fixed total supply of 1 billion LDO | Total supply commonly cited as 1 billion ETHFI; verify in official docs |
| Main risks | Smart contracts, stETH discount, concentration of staked ETH | All of Lido's types of risk plus restaking and extra slashing conditions |
How Lido Works
Lido launched in December 2020, shortly after Ethereum's Beacon Chain went live, when staked ETH could not yet be withdrawn. It let users stake any amount of ETH and receive stETH, a token that could be traded or used in DeFi while the underlying ETH stayed staked.
stETH is a rebasing token: your balance increases daily as staking rewards accrue. Because some DeFi apps handle rebasing tokens poorly, Lido also offers wstETH, a wrapped version whose balance stays fixed while its value in ETH rises. Lido takes a fee from staking rewards, split between node operators and the DAO treasury.
Lido's size is both its strength and its main criticism. A large share of all staked ETH flowing through one protocol raises concerns about concentration on Ethereum. Read more in What Is Lido DAO (LDO)?.
How ether.fi Works
ether.fi is a liquid restaking protocol. When you deposit ETH, it is staked on Ethereum and then restaked: the same staked ETH is committed to help secure other services, such as those built on EigenLayer. Those services can pay additional rewards, and ether.fi has also run points and incentive programs.
You receive eETH, which rebases, or weETH, a wrapped non-rebasing version widely used in DeFi. The ETHFI governance token was launched in 2024. The protocol has also expanded into additional products such as vaults; check the official site for what it currently offers. Our explainer What Is ether.fi (ETHFI)? covers the token in more depth.
Staking vs restaking in one example
For example, imagine you stake a hypothetical 10 ETH. With liquid staking, those 10 ETH secure Ethereum and can be penalized only under Ethereum's rules. With liquid restaking, the same 10 ETH also back other services, so they can be penalized under Ethereum's rules and the additional services' rules. Extra rewards, extra conditions. Our guide to liquid staking tokens vs liquid restaking tokens goes further.
Who Each Suits
Lido may suit people who want exposure to Ethereum staking rewards with fewer moving parts and prefer the longest track record in liquid staking.
ether.fi may suit people who understand restaking, accept added complexity and are comfortable that extra rewards are not guaranteed.
Neither may suit someone who needs guaranteed access to ETH at full value at all times; withdrawal queues and secondary market discounts can both apply.
Questions to Ask Before Depositing With Either
Whichever protocol you look at, work through these checks first:
- 1How do I exit? Find out whether withdrawals go through a queue, how long it has taken historically, and whether selling the token on a DEX is the only fast option.
- 2What fee is taken? Both protocols take a share of rewards. Read the official docs for the current fee split rather than relying on third-party dashboards.
- 3Who runs the validators? Look at how operators are selected and how many there are. Fewer, larger operators mean more concentration.
- 4What extra layers am I adding? If you deposit the staking token into a lending market or vault, you add that protocol's risk too.
- 5What does the audit history say? Audits reduce risk but never remove it; read our guide on evaluating a smart contract audit report.
- 6Is this the real contract? Confirm stETH, wstETH, eETH or weETH addresses on official documentation before swapping, because copycat tokens use the same names.
Shared Risks
- 1Smart contract risk. Bugs in either protocol's contracts could lead to losses.
- 2Depeg risk. stETH, eETH and their wrapped forms can trade below ETH, especially when many holders want to exit at once.
- 3Slashing. Validators can be penalized for downtime or misbehavior; restaking adds more conditions.
- 4Leverage loops. Borrowing against staking tokens to stake more amplifies losses if the token depegs. See liquidations in DeFi.
- 5Governance token volatility. LDO and ETHFI can move very differently from ETH.
- 6Phishing. Fake staking dashboards and "claim" pages target both communities. Always reach the app from a bookmarked official URL.
Bottom line
Lido and ether.fi both turn staked ETH into a tradable token, but Lido sticks to Ethereum staking while ether.fi adds a restaking layer for potential extra rewards and extra risk. Their governance tokens, LDO and ETHFI, are separate assets with their own volatility. Decide how many layers of risk you are comfortable with, then verify contract addresses and withdrawal terms on official sources before depositing.
Frequently asked questions
What is the difference between Lido and ether.fi?
Lido is a liquid staking protocol: you deposit ETH, it is staked on Ethereum, and you receive stETH. ether.fi is a liquid restaking protocol: your staked ETH is also restaked to help secure other services, and you receive eETH or weETH. Restaking can add rewards but also adds another layer of risk.
Are stETH and eETH the same as ETH?
No. They are tokens representing a claim on staked ETH plus rewards, issued by each protocol. They usually trade close to ETH but can trade at a discount during market stress, and redeeming them for ETH goes through a withdrawal queue that can take time.
What are LDO and ETHFI used for?
LDO and ETHFI are governance tokens. Holders vote on protocol decisions such as fees, operator rules and treasury use. Owning them does not give you staked ETH or staking rewards directly, and their prices can move very differently from ETH.
Is liquid restaking riskier than liquid staking?
Generally, yes. Liquid restaking includes all the risks of liquid staking, such as smart contract bugs, validator penalties and depegs, and adds the risks of the restaking layer and the services it secures, including extra slashing conditions and more complex contracts.