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Investor optimism and strong fundamentals are fuelling ETHFI recent rise, says Modular Crypto co-founder.
The ETHFI token soared this week, leaving the $4 price range on Mar. 24 to its $8,50 peak on Mar. 27. ETHFI is the native token of the liquid restaking protocol EtherFi, and was recently distributed to users who interacted with the platform.
Matheus Guelfi, the co-founder of Brazilian educational collective Modular Crypto, explained that one of the reasons behind this price rise is that only approximately 12% of ETHFI’s supply is circulating.
“6% of the total supply was airdropped to the community, and many wallets are still keeping the token expecting a higher valuation,” Guelfi adds. “Moreover, wallets that received over 25,000 tokens are still in the vesting period, and the token was made available rapidly on centralized exchanges, prompting buyers’ movement.”
The ‘value accruing’ mechanism announced by EtherFi also plays an important role. The mechanism promises better ranking for ETHFI holders in the protocol’s StakeRank and, while there are no more details about it, there’s speculation about a staking program and revenue share, says Guelfi.
Furthermore, the fundamentals might also be in play. Guelfi labels EtherFi’s team as “renowned” and “innovation-focused”, which gives them an edge in the hot narrative that the restaking market is currently.
“EtherFi presents itself as the staking protocol with the highest growth in the last six months, with inflows of over 800,000 ETH, seconded only by Lido. It is strategically positioned in the center of the hottest narrative right now, the restaking. Investors anticipate a higher yield than that from conventional staking, which puts EtherFi on an ascending trajectory of growth and market share,” concludes Guelfi.