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EtherFi CEO Mike Silagadze doesn't think crypto has a product problem but rather a distraction problem:
"Look at crypto consumer apps like Pump.fun, centralized exchanges, even Polymarket, and it's casino version one, casino version two, just different window dressing. 'Gamble on the weather now.' It's super profitable, because gambling is a hugely profitable industry."
Silagadze said as much to David Hoffman on the latest episode of the podcast amid laying out what EtherFi, as a self-custodial neobank that's evolving into a de facto neobrokerage, provides an alternative against.
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EtherFi is explicitly the more boring, more sustainable foil, aimed at offering useful financial products that can actually bring in, and retain, normal people. Naturally this vision was the fuel behind the platform's new Summer features releases, including expanded fiat rails, Aave credit lines, tokenized stocks, and beyond.
As David put it on the show, then, EtherFi's roadmap so far has been a sequence of money verbs it's unlocked one by one, in step with Ethereum's own maturing infra. Saving came first, via the liquid restaking vaults that made EtherFi its name. Spending came next, once stablecoins and the EtherFi card turned those restaked assets into something usable in everyday life.
This fresh Summer release has added two more in one go, namely investing and borrowing.
Investing means the EtherFi app can now hold tokenized stocks and metals alongside crypto, launching out of the gate with xStocks and, per Silagadze, with plans to expand permissionlessly to whatever else lands on Ethereum going forward. "It's the first time, I think, a crypto neobank has allowed people to [trade stocks] with the same non-custodial goodness," he said.
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Borrowing means EtherFi now has a new Aave V4 market that treats your entire portfolio (crypto, stablecoins, stocks, gold, etc.) alike. This lets users tap one pool of collateral for a single credit line, rather than requiring a separate loan against each asset. The design of this lending market is also where EtherFi's anti-casino philosophy shows up in the code. Most DeFi lending markets, in Silagadze's view, are built for degens:
"It's a wood chipper. You just feed users into it: they lose money, get wiped out, earn a bit back, and put more in. That's the casino business model. We can't do that to our users, or we go out of business."
As such, EtherFi built something more conservative on purpose. A few specifics worth knowing about this new Aave meld:
- Typical Aave markets have a single line, i.e. cross it and you're liquidated. EtherFi's market adds an earlier, softer threshold that just pauses further borrowing, with liquidation only kicking in much later. As Silagadze put it: "We have one conservative threshold where even a 40% price move won't kill you, and a much higher threshold where you actually get liquidated. We're not looking for people to come here and go max degen. This is meant to be a personal finance tool."
- Additionally, the current market is a single unified pool on Optimism, with a second spoke reportedly planned for more DeFi-native activity. Deposits are permissionless, open to anyone looking to earn yield, and that outside capital is what actually funds the loans on the other side.
- As for the economics, per a public Aave governance proposal the plan is that EtherFi will keep 80% of the revenue its market generates, with Aave taking a 20% cut for serving the underlying infra.
Will this new offering be a hit? We'll see. But ultimately what's at stake is the prize that crypto casinos are seemingly leaving on the table, which is regular non-degen revenue. As Silagadze said:
"Neobanking, forget banking generally, is a $300 billion revenue industry today. That's about 300 times larger than DeFi. All this gambling stuff we're doing is a distraction, really. The sooner we get past that, the sooner the actual benefits of crypto start to accrue."
Again, whether the neobrokerage model can beat "casino" as crypto's biggest growth engine is very much still an open question. But EtherFi has now spent multiple product cycles refining in this direction, and if any team can pull it off, they're currently positioned to do it first.
In the meantime, we have only to look to the future, and we've already gotten a preview of that. EtherFi's next release, teased on the show as "Autumn," is reportedly aimed at actualizing a social, peer-to-peer layer for the app. Silagadze described the idea like so:
"Imagine sending someone $10 and they open it up to a fully functional account, no bank account required on their end. They can spend it, send it to someone else. The unit of money itself becomes self-sovereign."
Pretty interesting idea, and natural open terrain for EtherFi to push out into next. For now, then, let's see if this experimentation will translate to deeper adoption of EtherFi's stack.
