Liquidity restakage startup Ether.fi’s latest product may finally help “paper-rich” cryptocurrency DeGeneres turn her blockchain investments into pocket money.
Ether.fi Cash is a mobile wallet and Visa credit card that allows you to borrow the popular US Dollar-backed stablecoin USDC for decentralized finance (DeFi) investments and repay directly in cryptocurrency.
“Our mission is to build a suite of integrated apps that make DeFi practical for the masses,” said Ether.fi founder Mike Siragadze. “The dream is that cash is your spending account and you don't have to off-ramp off the blockchain.” “Off-ramp” refers to the cumbersome (and fee-intensive) process of converting between cash and cryptocurrency.
Today, Ether.fi is best known as a service for funneling assets into EigenLayer, an Ethereum-based restakaging giant that helps investors secure emerging blockchain services in exchange for rewards. EigenLayer has attracted roughly $18 billion worth of deposits over the past year, with over $5.5 billion of that coming from users who initially deposited their money on Ether.fi and redeemed it for eETH tokens. eETH tokens are like receipts for EigenLayer deposits that can be traded on the crypto markets like any other asset.
In addition to the “Stake” program, Ether.fi also has a “Liquid” program, which allows users to deposit funds into a vault that follows a manually curated trading strategy.
Ether.fi Cash cardholders can borrow funds against their Stake or Liquid deposits and automatically pay bills using the interest from that investment. Users can alternatively convert their assets directly to USDC for instant settlement.
With Cash, “you can go to Ether.fi once and save, invest, and spend your money, and never have to go back,” Silagadze said. “You can get rewards in crypto and live your life normally without being connected to the TradFi ecosystem.” Ether.fi aims to offer a crypto-centric rewards program similar to those offered by Chase and other traditional card providers. It also aims to differentiate itself from traditional credit cards with a fee structure that is in line with the DeFi market, rather than the standard 15-30% APR charged by regular credit cards.
While Cash is not the first attempt at a cryptocurrency-based card, Shiragadze claims that previous attempts to develop similar products have ended up being “garbage.”
“Most of them are Visa debit cards,” he says. “Visa debit cards don't make sense because you can only use them for things like hotels and rental cars. They don't have much use. They're not practical.”
“This is a real credit card,” Shiragadze emphasized.
He expects Cash to roll out to consumers from September, but it will likely not be available in some large markets, including the U.S., for regulatory reasons.
Using cryptocurrencies as cash always comes with unique complexities, from market considerations to tax implications.
“Initially, this is designed for crypto-natives,” Shiragadze said, “but maybe someone who is thinking about becoming a full-blown degenerator might see something like this and be like, 'Okay, this can actually help me navigate this world.'”
