ETHFi Experiences Significant 9% Decline: Users, Liquidity, and Revenue Decline

ETHFi faces sharp 9% drop - User activity, liquidity, and income plunge

ETHFi has recently faced a considerable decline, marked by a 9% drop. This downturn has been linked to a steep reduction in user activity, liquidity, and overall income generation. With daily active users dwindling to a record low, the outlook for the protocol appears bleak.

Key Takeaways

A dramatic decrease in fees by $98,000 and a liquidity drop to $680,000 triggered the decline.
Daily active users fell to 328, the lowest since July, while Total Value Locked (TVL) decreased to $9.92 billion, indicating a mass exit of investors.
EtherFi (ETHFi) experienced one of its largest outflows in a single day, attributed to deteriorating on-chain performance across the market.
Further price declines for ETHFi could be anticipated as these trends develop.

Users Exiting the Platform

ETHFi's recent struggles can be traced back to a significant drop in users. The latest data from Artemis indicates that active transaction users have plummeted to figures last observed in July 2025. Currently, just 328 users are engaging with the protocol, signaling diminished investor enthusiasm. This trend has had a direct impact on revenue generation, as transaction fees have sharply decreased.

EtherFi - Daily Active Addresses

Source: Artemis

To put these numbers into perspective, fees have dropped from approximately $210,500 to $111,700 in just one day, resulting in a loss of around $98,000 that could have bolstered the protocol's earnings. However, waning protocol usage is not the sole issue concerning ETHFi; AMBCrypto's analysis highlights other contributing factors to the increasing sell pressure and diminishing liquidity.

Increased Sell-offs Amid Liquidity Crisis

Market trends show significant sell-offs as investors look to decrease their exposure to ETHFi. The liquidity available for the staking protocol has hit its lowest point this year. Data from DeFiLlama reveals that on-chain liquidity for ETHFi is now around $680,000.

This sharp decline indicates a decrease in the amount of ETHFi locked in decentralized exchanges (DEXs) like Uniswap (UNI), reflecting a diminishing long-term conviction among investors who are selling off their tokens to avoid further losses in a deteriorating market environment.

EtherFi TVL and Liquidity chart.

Source: DeFiLlama

Moreover, the Total Value Locked (TVL) across ETHFi protocols has fallen to $9.92 billion, paralleling the liquidity decline and indicating that investor sentiment remains cautious and risk-averse.

Weak Overall Protocol Performance

ETHFi's overall performance continues to highlight a bearish sentiment in the market. Recent reports disclose that Net Holder Income (NHI) for the fourth quarter has diminished to just $464,000, a sharp decline from $3.9 million in the previous quarter. At the peak, ETHFi was generating about $1.3 million monthly or $650,000 bi-weekly.

These numbers indicate that the protocol is not living up to its previous performance benchmarks, suggesting that ETHFi holders may see reduced income in October.

EtherFi net Holder income chart.

Source: DeFiLlama

The overall decline in income further diminishes the incentive for holding the asset, putting additional pressure on investor confidence in the short term.