Mike Silagadze - Stablecoin Banking - TOKEN2049 Singapore 2025

Uh my name is Mike Sgadzi. I'm uh one of the founders and CEO of EtherFi. And I'm going to talk to you about our vision for what stablecoin banking looks like? Uh first of all, maybe before I before I begin, how many people have heard of Etherfry? Okay, few hands went up.

How many people actually use the product, whether it's staking or the card or anything else? Okay. All right. I've got some work to do. Um, but uh, so, uh, what is Etherfy?

Uh, EtherFi is what we call a DeFi bank, which is to say a full endtoend alternative to traditional banking. So, if you've used products like Revolute or New Bank or Chime, uh, EtherFi looks and feels very much like that. If you download the app, you'd have things that resemble what you'd get from a traditional custodial bank, but in a non-custodial cryptonative uh framework. So, a full endto-end alternative to banking. We're one of the largest DeFi protocols on Ethereum built on Ethereum.

Uh we have about 11 billion dollars in TBL. Uh we have uh hundreds of thousands of users. Uh and we have the leading non-custodial uh credit card on the market. Uh if you want to check it out, just go to ether.fi.

Uh you can sign up, you can uh uh try out the product. Uh and hopefully that'll that'll give you a little bit of a vision about what the the future has in store. Okay. So, uh when you think about traditional banking, there's a number of services that banks uh uh provide for for most people. Uh you need to be able to have an account into which you deposit your money.

uh and that account in some cases might pay you an interest rate. You need to be able to take some of that money from your account and deploy those assets to invest them into stocks, bonds, whatever. Uh you need to be able to borrow against your assets and spend them. You to use them in your in your day-to-day life. And uh you know, if you want to be able to you know take more speculative bets, you want to be able to trade uh your assets.

So if you look at Etherfy, we have a vertically integrated suite of products in one single app, iOS app or web app, whatever you prefer, uh called stake, liquid and cash, which respectively give you analogously a savings account powered by staking where you can uh hold your USD stables or ETH or BTC or soon hype uh tokens as well. Uh we have liquid vaults which allow you to deploy your assets in a single click into DeFi and earn yields uh that can be as high as 10 15% on on your stables. Uh obviously variable with with DeFi. And then we have cash which is a non-custodial credit card uh that lets you borrow against your portfolio everything that you have in your Ether account and spend it in your day-to-day life. And soon uh coming towards the end of this year, Ether Trade uh which is a will allow you to borrow against your your assets in the vault uh and open up per and spot positions powered by by Hyperlquid.

Uh these are separate products, but as I said it when you use it on a day-to-day basis, it's one integrated experience. At Etherfy, our mission remains to give you everything you need to take charge of your wealth and break free from the limitations of traditional finance. And now it's easier than ever. Bank transfers are here, allowing you to move funds between Ether and your traditional accounts anywhere in the world, all from one place. Fast, simple, global.

The cash credit card is now physical. Spend your crypto anywhere, even at ATMs. Groceries, flights, late night snacks, your crypto, your life. No selling, just swiping. With Club membership points, we're leveling up how rewards work.

Connect your wallets and earn points for everything you do across DeFi with Ether. Do more and earn more. And we're pushing deeper into DeFi with B Hype, a new liquid restaking token coming soon to Hyperliquid. This will be the catalyst to our new product, EtherFi Trade, allowing you to trade spot and per with ease. Get ready for the next phase of EtherFi.

Great. Uh so, one of the things that makes EtherFI unique as a DeFi protocol is that we actually have a real uh business model. uh and uh across our various uh lines of uh lines of business across the various products you find sources of revenue that are very much analogous to what you would see from traditional banking. So in a traditional bank when you deposit your your dollars and I'm grossly oversimplifying here the banks earn some sort of rate of return maybe from T bills maybe if they you know decide to gamble on mortgage bonds whatever it happens to to be um and then the bank takes a slice of that and gives you a small share of it. Uh with Ether the uh the fee that we take is much smaller.

uh we take a small cut of staking rewards and the majority of the yields in a transparent way are passed on to the uh user again fully non-custodial uh fully transparent on chain with our D5 strategy vaults uh as I said that's like uh DeFi on autopilot or the easy mode uh where you click one button and it deploys uh your assets whether it's ETH BTC stables into the best DIY strategies out there uh and Ether generates revenue on that um uh on the management ment of those uh those vaults. Uh and then finally on the cash product, the the credit card, Ether generates revenue on the interchange uh FX travel rewards and bookings that go through our platforms and then if people borrow uh against their assets, we make a spread on the uh on the borrow. So it again these are very analogous of lines of revenue that traditional banks generate. But the power of it is that it's fully non-custodial. It's onchain.

It's transparent. the fees are a lot lower um and the users get higher rewards. So uh the reason that's this is a significant development is that if you think about Etherfy as an alternative to a traditional financial institution if Ether was a bank let's say uh with 11 billion of deposits uh the company would a company like that would likely have five 600 employees would have a cost basis of around $und00 million uh in terms of uh the cost to to operate. Uh whereas when you look at something like Etherfy, we have about 30 employees and our cost basis to operate is closer to 15 to 20 million. And so that's remarkable.

That means we can effectively provide an alternative service to traditional banking um at less than onetenth of the cost that it would it would cost traditional institutions, traditional financial institutions to provide which means we can be a lot less extractive with our users. uh we don't need to charge as many fees, we don't need to abuse our users with all kinds of hidden charges. Instead, we can just focus on providing a really great product with low fees and and great rewards. And for that reason, you know, we believe that there's an opportunity here to replplatform certainly the neo banking space, which is about $175 billion a year in revenue, uh which is, you know, about a hundred times more revenue than all of DeFi combined at this point. But broadly over time, even all of banking uh uh and I think we've been doing a pretty good job of that.

Uh these are uh uh the charts are small and they're also out of date. Uh but our TVL has continued to uh to grow. We have close to three million ETH uh staked on the platform uh which is about I think these days 10 or 11 billion. Our card uh is doing about just over a million dollars a day in transaction volume. uh which is it makes it the largest uh non-custodial card on the market and certainly one of the largest uh uh crypto cards on the market in general.

Uh and the growth has been just really phenomenal over the last little while and we've been around for about 2 years uh which you know from a fintech standpoint being able to grow at this kind of pace over that period of time is you know would make us a you know one of the most attractive fintech uh uh products out there. Uh and as I said you know we this actually generates revenue. So, our first year in business, which was 2024, uh we generated about $26 million in revenue and we were profitable net of any token emissions and you know all the games that D5 protocols play. Um and this year we're we're likely going to have an exit velocity uh of over $und00 million in revenue, probably about 60 $65 million for the year. So remarkably fast growing uh really efficient business uh all powered by DeFi and uh we also have a governance token called ETHI and so uh the way the value acrews to that governance token is through revenue powered buybacks.

So we take a portion of our uh profits uh revenues and profits from the protocol and that goes to buy back uh the uh token from the open market. So, so far uh again I think this is already uh out of date. We've done about $78 million uh of buybacks just over the last uh mostly over the last quarter. Uh and we plan obviously to continue to uh to do that uh as we uh as we scale. Great.

Uh so hopefully this gives you some idea of what uh uh what a stablecoin powered bank looks like. It's not going to be necessarily something like a traditional bank uh just using stable coins for transfers. What it's going to be is an endto-end revolution in what banking actually looks like. A full end-to-end alternative powered by crypto and DeFi. Thank you.