Key Takeaways

What caused ETHFi’s recent 9% decline?

The drop followed a $98K plunge in fees and a massive liquidity drawdown to $680K.

How severe is ETHFi’s on-chain slowdown?

Daily active users dropped to 328, the lowest since July, while TVL fell to $9.92B, reflecting a deep investor exit.

EtherFi [ETHFi] has seen one of its steepest outflows in the past day, recording a 9% drop.

AMBCrypto traced this decline to weakening on-chain performance across the market. The effects are gradually surfacing, and a further drop could follow.

These factors will likely shape ETHFi’s price dynamics in the coming days.

Users churn at the helm

The decline in ETHFi’s performance stems largely from a sustained exit of users from the platform. According to recent data from Artemis, transaction users have fallen to levels last seen in July 2025.

Currently, only 328 on-chain users interact with the protocol—a clear sign that investor sentiment has weakened. This trend has directly impacted the protocol’s revenue, with fees generated plummeting sharply.

Source: Artemis

To put this in context, fees dropped from $210,500 to $111,700 in just one day, reflecting a loss of about $98,000 that could have contributed to protocol earnings.

Declining protocol usage, however, isn’t the only challenge facing ETHFi. AMBCrypto’s analysis found other factors contributing to rising sell pressure and reduced liquidity.

Sell-offs heighten amid liquidity crunch

Market data shows a notable sell-off as investors continue to reduce exposure to ETHFi. Liquidity within the staking protocol has dropped to its lowest level this year.

According to DeFiLlama, the total available on-chain liquidity for ETHFi now stands at roughly $680,000.

This suggests that the amount of ETHFi locked in decentralized exchanges (DEXs) like Uniswap [UNI] has declined sharply.

The fall indicates waning long-term conviction, as investors are offloading tokens to avoid further losses amid worsening market conditions.

Similarly, the total value locked (TVL) across ETHFi protocols has also plunged, currently standing at $9.92 billion.

This pattern mirrors the liquidity decline, signaling that investors remain cautious and risk-averse.

Protocol performance stays weak

ETHFi’s overall protocol performance continues to reflect the bearish outlook in the market.

Reports show that Net Holder Income (NHI) for the fourth quarter stands at just $464,000—a steep drop from $3.9 million recorded in the third quarter.

At the time, ETHFi generated about $1.3 million monthly or $650,000 bi-weekly.

The figures show the protocol has failed to match its earlier performance, suggesting that ETHFi holders will likely receive less income in October.

This decline adds to the already low incentive to hold the asset, further straining investor confidence in the short term.