The Big Whale: Where are you currently in your development? What's the latest from EtherFi?
Mike Silagadze: We had a major milestone last week with a launch that included a number of developments. Firstly, we reworked our brand slightly: previously, EtherFi had a very crypto-native positioning, centred on our three main products - Stake, Liquid and Cash. Now, we're adopting an image much closer to a fintech, in the spirit of a crypto-native bank. This is an important evolution in the way we present ourselves to the public.
Next, we opened registrations for our "Cash" credit card, for both individuals and businesses. We are already seeing a large number of registrations. The application has also been redesigned to provide a smoother, more integrated experience. Overall, the big headline is that we are launching what we call an "integrated DeFi bank": a true banking alternative built on crypto rails.
How do you differ from products like Gnosis Pay?
There are indeed many crypto cards on the market, but our ambition is different: we offer a truly comprehensive solution. It's not just a bank card, but an integrated banking offering including savings account, investment account, and an all-in-one app.
The main difference with projects like Gnosis Pay is not just a question of fees or user experience, even though we think we're better on those points, but rather of ambition: we're building a complete banking alternative, comparable to a Revolut, whereas a project like Gnosis Pay is more like a simple specialist product. These are two very different levels of offering.
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Some people are surprised because EtherFi was perceived as an infrastructure project, particularly with your start-up around cash restaking. Why this shift towards consumer DeFi banking?
In reality, it's not a shift for us. It's a natural extension of what we've been building for a long time, even if we've probably failed to communicate it properly. We had already launched our Liquid product, an investment product, eight months ago, and announced the launch of the Cash card more than six months ago. This DeFi bank project is therefore the fruit of a long building process, and not a last-minute pivot. EtherFi has always been conceived as a user-oriented platform, not a purely infrastructural one.
>> EtherFi (ETHFI) : Analysis of the leader in liquid restaking
Are you planning to obtain regulatory licences, particularly in Europe?
Yes, we are already in the process of applying for several licences, both in Europe and North America. We are also working with regulated partners, in particular to issue credit cards. As far as Europe is concerned, we don't think we need a MiCA licence because we are not a custodian. But we are looking closely at the possibility of obtaining an EMI (Electronic Money Institution) licence as well as a VASP (Virtual Asset Service Provider) licence. This process is still ongoing.
"By 2025, our aim is to reach between 50,000 and 100,000 active users using our full banking offering" Have you chosen a jurisdiction in Europe to establish yourself?
Not yet officially, but Spain is our most serious option at this stage. The European regulatory landscape is complex, with many jurisdictions being unwelcoming to crypto projects or pretending to be but never issuing licences. Spain, on the other hand, offers a relatively favourable environment. We've also looked at other countries such as Switzerland and Luxembourg, but Spain now seems the most pragmatic option for us.
What is your long-term ambition for EtherFi?
Our ambition is to build a genuine on-chain banking alternative capable of attracting hundreds of millions, if not billions, of users over time. In the short term, for 2025, our goal is to reach between 50,000 and 100,000 active users using our full banking offering.
For 2026, we are aiming for at least one million users. If we achieve this, EtherFi will be by far the biggest DeFi project in terms of 'external' revenues, i.e. not linked to speculative trading. This is essential for us: we want to generate real revenue from real users, not just recycle the same existing crypto base.
How do you intend to attract new users, beyond the DeFi regulars?
We think there is already a huge CeFi user base, estimated at between 100 and 200 million people, who use exchanges but haven't yet switched to DeFi because it's still too complex. Between seed phrases, hardware wallets and transaction signatures, the experience is a deterrent.
So we don't need to look very far: simply making access to DeFi as simple as CeFi will suffice. Then, the classic customer acquisition strategies from the fintech world - direct marketing, partnerships, affiliations - will be very effective, because we have a real source of revenue to make acquisition profitable.
"On the card, our main source of revenue is interchange" How did you design your bank DeFi wallet and what is its level of security?
We developed our own smart contract wallet. It's a new technology that allows you to send funds from different channels to your wallet instantly, without any noticeable gas charges or price slippage.
On the security side, users can attach a hardware key (like Ledger's, ed. note) or use modern devices like Passkey. Personally, I prefer Passkey for its simplicity. This wallet is at the heart of our ecosystem, and we soon plan to authorise the creation of several 'safes' to separate different activities.
What is your business model for the credit card?
Our main source of revenue is interchange: every time a user makes a purchase, the merchant pays a commission of around 2-3%, part of which goes to us. For the user, the card is free. We will also be launching an Aave instance to generate loan income from assets deposited in safes. Other sources of revenue will gradually be added as we flesh out the offering.
How do you manage to offer cashback on transactions (between 2% and 3% on each purchase), when most crypto cards struggle to offer it on a sustainable basis? Who is funding this cashback today?
The cashback we offer is made possible by our partnership with Scroll, the layer 2 solution on which our safes are deployed. Scroll currently subsidises our users' transaction costs. As gas charges are extremely low on their network, they can afford to fund part of the cashback without it being prohibitively expensive for them. In practical terms, this means that Scroll is helping us to make the user experience more attractive, while at the same time strengthening their own ecosystem.
This strategy is fairly classic in the development phases of a network: subsidise the activity to encourage adoption. Eventually, we'll need to find other relays to maintain attractive cashback programmes, but today, this support from Scroll is playing a key role.
How does the "borrow" mode work?
The "borrow" mode is a pretty exciting innovation: you can borrow stablecoins directly using your assets as collateral - be they cash, staking tokens or vaults. Then you spend these stablecoins using your credit card. Currently, we even have a 0% interest promotion on all loans for a few months, allowing users to enjoy free credit while continuing to generate returns on their deposits.
Who is your card issuer?
We work with two sponsoring BINs: Rain, based in Latin America, and Reap, based in Hong Kong. Rain enables us to issue cards in the United States, the Caribbean and Latin America, while Reap manages our corporate offering. In Europe, we operate under reverse solicitation, which means we cannot actively market to European residents until we have a European issuing partner.
Are you profitable today with EtherFi?
Yes, EtherFi is profitable. In 2024, we generated nearly $26 million in revenue, with a profit of around $2 million. For 2025, depending on the ETH price, we estimate we can reach between 45 and 90 million in revenues, which will allow us to be comfortably profitable.
How do you explain then that your token has lost value recently?
You just have to look at the market. Everything is correlated and most tokens have lost between 50% and 90% of their value. We can't escape the gravity of the market, no matter how successful our business is.
"Successful airdrops are simple: be generous, distribute the tokens without complex conditions, and unlock everything from day one" You're being recognised for your successful airdrop in 2024. In your opinion, what are the best practices for a successful airdrop in 2025?
Successful airdrops are simple: be generous, distribute tokens without complex conditions, and unlock everything from day one. Unfortunately, the current environment makes this more difficult, as token valuations at launch are much lower. But despite everything, transparency, simplicity and generosity remain the keys to creating a positive community around a project.
You were a partner in Babylon's airdrop. Can you go back over what happened?
I take full responsibility: our points tracking system contained a number of errors when allocations were first made. We recognised this problem, made internal changes and corrected the allocations. Today, we estimate that 95% of the data is correct. Even though the initial error caused confusion, we did everything we could to rectify the situation quickly and ensure that users received the correct allocations. Babylon is not our token, we simply transfer tokens to users in a transparent manner.
Why doesn't EtherFi clearly communicate the ratio of points earned to tokens allocated during airdrops?
This is a regulatory constraint. The purpose of a points system is precisely to create a legal separation between the activity of users and a potential distribution of tokens, in order to comply with the laws in force, particularly in the United States. This prevents us from explicitly communicating a points/token ratio before the actual launch. While we understand that this may frustrate some users, we must scrupulously follow these recommendations to remain compliant.
How do you deal with the frustration or aggressiveness of some users about airdrops?
The best method is to be as transparent as possible about the eligibility rules from the outset. Obviously, there are legal limits: for example, it is often forbidden to announce that an airdrop is planned or to specify ratios between points and tokens. This makes communication difficult, but setting clear rules in advance helps to protect yourself and avoid unpleasant surprises.
"I sincerely think that Ethereum has hit its low point" Do you think the restaking craze has died down?
There was clearly a period of irrational madness around restaking. Today, expectations have returned to a more realistic level. Restaking is a complex technology that will take years to mature, but in the long term I remain very optimistic. At EtherFi, even though restaking remains important, the majority of our revenue today comes from our Liquid and Cash products.
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How do you see Ethereum's current situation and its future?
I sincerely believe that Ethereum has hit its low point. The recent changes at the Ethereum Foundation are positive. They are finally focusing on the right priorities: improving layer 1 scalability, cooperating better with layer 2s, and strengthening their relationship with enterprises. This makes me very optimistic for the future of Ethereum.
What is your institutional strategy for EtherFi?
Institutional adoption has been at the heart of our strategy almost from the beginning. A large proportion of our TVL today comes from institutions and high-net-worth customers. For our Cash offering, we have launched a dedicated version for businesses, and we are also seeing strong take-up. We believe that the future lies as much in B2C as in B2B.
What are the next steps in making EtherFi a truly on-chain bank?
There's still a lot to do. We need to add incoming and outgoing fiat ramps, integrate local payment systems like Venmo in the US or Pix in Brazil, develop support for a Euro card, and even offer direct payroll integration. Building a complete banking product does not mean launching a simple protocol: it is a huge project that will take several years to complete. But the response from users has already been very positive, and within six months we hope to offer an experience worthy of Revolut.
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