From Staking to Earning: Leverage Validation Cloud for EtherFi's Liquid Restaking

While the DeFi landscape is continuously changing, Ethereum staking remains a cornerstone. However, conventional staking methods can often restrict liquidity, tying up assets in long-term contracts with fluctuating returns. EtherFi's innovative liquid restaking solution, supported by Validation Cloud's performant infrastructure as a node operator, presents a compelling alternative. This article explores how this synergy enhances flexibility and potential returns, redefining Ethereum staking for everyday users.

Understanding Liquid Restaking and Its Advantages

Liquid restaking allows Ethereum holders to participate in network validation and earn staking rewards without locking their assets directly. Native Ethereum staking requires a 32 ETH lockup and technical expertise in running a highly performant validator node 24/7/365. Native Eigenlayer restaking requires a traversal to liquid staking protocols,  manually locking those tokens up into EigenLayer, and then delegating those restaked tokens to an operator of your choice. If you have followed this route already, check out our previous post on delegating to Validation Cloud on EigenLayer Mainnet to earn alongside us and the AVSs we are currently supporting.

If the complexity of these routes does not interest you, there is another way to get involved with restaking. 

Enter EtherFi, which allows you to stake your Ethereum with just one intent. The protocol automatically engages with various high-performing validators, including those run by Validation Cloud. This process is mediated by EtherFi's integration with the EigenLayer protocol, which facilitates re-delegation of staking power.

The primary advantage of liquid restaking lies in its enhancement of liquidity. When you stake your Ethereum through EtherFi, you receive a liquid token in return. This token represents your staked Ethereum and can be traded, used as collateral for loans, or leveraged in other DeFi applications, maintaining your liquidity even as you earn staking rewards. The flipside is native restaking, which does not provide any liquidity for the LSTs that you have restaked. 

EtherFi Loyalty Points and EigenLayer Points

It should also be noted that eETH and weETH holders will continue to earn EigenLayer points in addition to ether.fi Loyalty Points. According to EtherFi’s documentation, the protocol will pass 100% of points and any associated benefits from points directly to users, without withholding “ANY” points. Once you connect your active wallet to the ether.fi dApp, you should see points accruing in real-time. EtherFi hints that these Loyalty Points will play a role in decentralized governance.

How Validation Cloud Elevates EtherFi's Offering

Validation Cloud serves as a critical infrastructure backbone for EtherFi by operating high-performance validators that secure the network and optimize reward generation. Here's how Validation Cloud's operation adds value:

• Enhanced Security and Uptime: Validation Cloud's validators are designed to maximize uptime and network security, ensuring that staking penalties (such as slashing) are minimized, thereby protecting any assets allocated to us through the EtherFi protocol.
• Optimized Reward Distribution: By carefully selecting and managing high-performing validators, Validation Cloud facilitates improved reward rates for staked assets compared to individual or less optimized staking pools.
• Scalable Infrastructure: As EtherFi scales, Validation Cloud’s infrastructure can expand to meet increasing demand without compromising performance, ensuring a seamless and efficient staking experience.
  
  

EtherFi, supported by Validation Cloud, is a leader in liquid restaking innovation, offering a combination of flexibility, enhanced liquidity, and optimized returns that surpass traditional staking methods. By choosing to restake your Ethereum with EtherFi, you engage with a future-focused model of asset management that aligns with the evolving dynamics of the cryptocurrency markets. The integration of cutting-edge technology and solid infrastructure positions this as a premier choice for Ethereum users seeking to maximize their financial strategies in the DeFi space.

For more detailed information about Validation Cloud, visit our website. There, you can gain a deeper understanding of  our infrastructure and how we support Ethereum stakers like you.

Why Delegate to Validation Cloud on EigenLayer

Validation Cloud has consistently been a highly performant operator within the EigenLayer and EtherFi ecosystems. As one of the first 30 operators selected to join the EigenDA testnet, our active participation from Day 1 has now spanned more than six months, showcasing our dedication to supporting the ecosystem.

Since 2018, Validation Cloud has been at the forefront of Proof-of-Stake. We were one of the first oracles on Chainlink and one of the first validators on Polygon. Now, we're leading validators on Aptos and dYdX, and we support emerging powerhouses like Aleo, Berachain, ZetaChain, and Saga.

About Validation Cloud

Validation Cloud is a Web3 data streaming and infrastructure company that connects organizations into Web3 through a fast, scalable, and intelligent platform. Headquartered in Zug, Switzerland, Validation Cloud offers highly performant and customizable products in staking, node, and data-as-a-service. Learn more at validationcloud.io| LinkedIn | X