Proposal Summary
This proposal seeks approval to repurpose revenue generated by the eETH withdrawal queue towards ETHFI token buybacks. ether.fi generates revenue on the withdraw process through two different mechanisms - normal withdrawals forfeit yields during the exit process, and fast withdrawals charge a 0.3% fee on redemption. By pooling the withdrawal-derived revenue into a transparent buyback mechanism, we align protocol revenue capture with token utility, reduce circulating supply, and reinforce long-term stakeholder incentives.
Rationale
The ether.fi withdrawal queue operates in two modes:
- Slow Withdrawal
- Up to 14 day withdrawal window
- Validator exits are queued & upon claim, their eETH is burned
- Fast Withdrawal
- Instant withdrawal window
- Users pay a 0.3% fee on the withdrawn ETH
Redirecting this steady revenue stream into ETHFI buybacks will:
-
Enhance Token Utility
Regular buybacks create consistent support for ETHFI
-
Align Incentives
Users exiting via fast withdrawal still contribute to the protocol’s health, as their fee directly backs ETHFI tokens.
-
Transparent Revenue Utilization
On-chain buybacks offer transparency into treasury flows, strengthening community trust.
Details
- Fee Capture & Routing
- Source: 0.3% fast-withdrawal fee & staking yield on normal withdrawals
- Routing: Forwarded to a dedicated “Buyback Treasury” wallet
- Buyback Mechanism
- Frequency: Monthly on-chain buybacks via a DEX aggregator (e.g., 0x, Paraswap) to optimize execution price and minimize slippage.
- Cap: No cap; protocol reinvests all collected fees each cycle.
- Treasury Management
- Transparency: All deposits and swap transactions are verifiable on-chain.
- Usage: ETHFI Buybacks to be allocated to ETHFI stakers or Buyback and LP program
- Accounting: An on-chain registry records cumulative ETHFI purchased and burned or held.
- Integration with Governance
- The community may vote to adjust the structure or temporarily divert held tokens.
Proposal Review and Adjustments
- Parameter Tweaks: Governance may propose adjustments to swap frequency, aggregator venue, etc
- Transparency Reports: The core team will publish quarterly updates summarizing fees collected, tokens bought, etc
Diagram
Conclusion
By channeling withdrawal-generated revenue into ETHFI buybacks, we crystallize protocol value capture, deliver continuous support for the token, and transparently align stakeholder incentives. This mechanism strengthens ether.fi’s economic design, rewarding both active participants and long-term holders.
Next steps
Voting Duration: 4 days
Voting Platform: https://snapshot.box/#/s:etherfi-dao.eth/proposal/0x6a9bdf1bb43b3e38f7313247464360ab3c637dd54f45c99dfaa085539c0dc693
Voting Options:
- For: Approve the withdrawal revenue buyback program
- Against: Do not approve the proposal
Thank you for your continued support