The performance of EtherFi’s token could lift valuations of other restaking platforms ahead of their airdrops, one analyst noted.
Ether.fi (ETHFI) Sell-Off Intensifies As Arrington XRP Capital Shifts Holdings To Binance, Will $3 Support Hold?
ETHFI, the governance token for the Ether.fi staking protocol has seen a significant drop in price since its debut on Binance on Monday, March 18. After initially trading at $4.13, the token has lost over 25% of its value, raising concerns among investors.
Nonetheless, recent on-chain activity has fueled speculation of further sell-offs, potentially threatening the token’s stability and its ability to hold the $3 mark. In particular, blockchain analytics firm Nansen has identified interesting behavior involving Arrington XRP Capital on the Ether.fi platform, highlighting some significant transactions.
Price Concerns For ETHFI
In a recent post on social media site X (formerly Twitter), Nansen’s analysis reveals interesting activity involving venture capital fund Arrington XRP Capital on the Ether.fi platform.
According to the blockchain analytics firm, Arrington XRP Capital minted 5,000 units of eETH, Ether.fi’s natively reshaped liquid staking token. Notably, these eETH tokens were distributed to ten different wallets, each containing 500 units.
Following the distribution, Arrington XRP Capital proceeded to claim a total of 200,498 ETHFI tokens across the ten wallets. The funds were transferred to another address, consolidating the acquired ETHFI tokens.
In the final step of the observed activity, Arrington XRP Capital sent the entire balance of ETHFI tokens to the Binance cryptocurrency exchange, potentially for selling purposes, which could put further pressure on ETHFI.
However, the Ether.fi team has responded to the speculation surrounding the on-chain movements made by Arrington XRP Capital.
Ether.fi Clarifies
According to Ether.fi, Arrington XRP Capital has been a consistent investor in the platform and has provided significant support since its inception. The statement further noted that as early adopters and active stakers, the Arrington team has actively staked its assets on Ether.fi, contributing to the platform’s growth.
The multi-wallet distribution observed in recent activity did not surprise Ether.fi, as they were reportedly informed of this approach in advance.
Ether.fi claimed that splitting the assets into multiple wallets did not provide additional benefits or change the distribution outcome. The protocol alleged that consolidating the assets into a single wallet would have produced the same results.
The protocol alleged that these assets are part of their liquid funds, which are “actively traded.” The decision to transfer the assets to the Binance cryptocurrency exchange was motivated by the nature of their trading activities and liquidity needs, the Ether.fi team concluded.
Arrington Capital Addresses Speculations
The Arrington Capital team also clarified the context through a social media post. They clarified that they had been long-term investors, staking over $50 million of ETH since February 2023.
The company claimed that the recent sale of a “small percentage” of its initial airdrop tokens amounted to less than $700,000, allegedly representing only 0.1% of the day’s trading volume.
Ultimately, Arrington Capital emphasized that their actions were not a “Sybil attack” and did not exploit the protocol’s distribution methodology. They wrapped up their response by claiming that airdrop distribution follows a linear model that is “unaffected” by distribution across multiple wallets.
Featured image from Shutterstock, chart from TradingView.com
Ether.fi $210M Airdrop Sparks Market Turbulence, ETHFI Value Drops By 35%
ETHFI, the governance token of the decentralized liquid staking protocol Ether.fi, debuted for $4.13 following its distribution through its airdrop on March 18.
However, since the $210 million airdrop, the value of ETHFI has experienced a significant decline, plummeting over 35% to its current trading price of $3.05, according to CoinGecko data.
ETHFI Airdrop Attracts 20,000 Participants
Market expert Tom Wan has provided a summary of the ETHFI airdrop. Out of the total supply of 16.8 million ETHFI tokens, approximately 28% have been claimed by participants.
The airdrop attracted around 20,000 claimers, showcasing considerable interest in the token distribution. Notably, the top wallets, accounting for 1.67% of the total distribution, have the potential to receive between 10,000 and 25,000 ETHFI tokens, reflecting substantial holdings.
Most claimers, comprising approximately 67% of participants, are expected to receive a lower allocation of ETHFI tokens, ranging from 175 to 500.
This distribution strategy aims to ensure a broader and more equitable dispersion of the tokens among participants. However, an interesting observation is that 76% of claimers have transferred their ETHFI tokens to other wallets, indicating a potential desire for liquidity or trading activities.
Furthermore, it is noteworthy that 38% of the token receivers are new wallets, suggesting an expansion of the ETHFI user base as of May 1, 2023. This influx of new participants showcases a growing interest in the governance and utility offered by Ether.Fi’s protocol.
Ether.fi Witnesses Surge In Total Value Locked
Ether.fi has experienced notable growth in net deposits and Total Value Locked (TVL), as evidenced by data provided by Token Terminal. However, the platform has faced fluctuations in its active user base.
According to Token Terminal, net deposits on Ether.fi have significantly increased, reaching $2.99 billion over the past 30 days alone. This marks a significant growth rate of 136.9%.
Simultaneously, the TVL on Ether.fi has mirrored the surge in net deposits, which also amount to $2.99 billion over the same 30-day period. This metric represents the total value of assets, predominantly cryptocurrency, locked within the protocol.
However, while Ether.fi has witnessed robust growth in net deposits and TVL, the platform has experienced fluctuations in its active user base. Daily active users have shown a considerable decline of 54.3% over the past 30 days, currently standing at 506.
Similarly, weekly active users have experienced a more moderate decline of 3.5%, currently standing at 5,780. This suggests that while there has been a slight reduction in user engagement every week, a significant portion of the user base remains actively involved with the protocol.
The most substantial decline in user activity is observed in monthly active users, with a notable drop of 68.9% over the past 30 days. The figure currently stands at 14,740 users.
Overall, the distribution of the ETHFI token through the airdrop has garnered significant attention and participation. At the same time, the token’s value has experienced a decline since its initial listing, the long-term potential and impact of ETHFI within the Ether.Fi ecosystems are yet to be fully realized.
Featured image from Shutterstock, chart from TradingView.com
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