EtherFi’s Plan to Build the Ultimate Crypto Neobank

Transcript

[music] bankless nation. We got Mike Sagazi from Ether back on the podcast. Mike, welcome back to the show. >> Hey, [music] thanks for uh having me on again. So, there is uh something brewing as I hear over in Ether, Ether land. Uh maybe for just listeners who haven't been paying attention to what's going on in Ether. Etheri really pioneered the Neo Bank whole revolution that started in 2024 and moved on into 2025. really kickstarted the whole NEO bank uh platform. I think uh first first um just with the whole restaking thing and then allowing people to do a lot of cool stuff in DeFi uh hold assets in Ether, deploy them into DeFi and also spend

them starting to like really chip away at the Trady banking system and allow some of the bankless ideas to manifest into a consumer app. As I hear it, Mike, you guys have a second act coming. Let me know. Tell me about this second act coming down the pike for Ether. >> Yeah, I mean I guess it's sort of like the third act, right? Our first product was the uh uh the yield layer. So it's almost like okay, we had to like uh create a version of uh uh this is not a perfect analogy. We had to create a version of T bills that allowed us to build on top of that all the other stuff that you know users come to expect from uh you know from a finan from Tradfi.

And so staking was the first yield layer defy strategy vaults. We were actually I think the first or one of the first protocols to have protocol owned vaults. Now that's like pretty common. Um but we introduced our you know our liquid vaults. So that was kind of like right you've got the yield layer but then you want to deploy it into DeFi to earn higher rewards, higher risk. So we introduced that. Then we launched the the sort of the wrapper around that with the uh you know the crypto uh credit card that created uh the first I guess proto version of a non-custodial crypto neo bank. Um uh and today I mean we're still the largest I think yeah if you look at all the crypto card programs we're by far the largest non-custodial one. Um, and uh, I think that the the

one that sort of creates the most integrated packaged experience for users that uh, achieves what I what I think is sort of the holy grail of of DeFi uh, which is truly allowing people to get off of uh, their traditional banking rails to have self-custody over their assets uh, but not make any sacrifices but you know continue to be able to use uh, uh, you know, interact with the normal financial system while getting the benefits of uh, of DeFi and um uh you know in self-custody. So uh so that was like the first version of it but but that first version was still very crypto uh forward. Uh I guess uh what I mean by that is you still needed to know a lot

about crypto to use this this product. Even just the the way the app the product was presented it was very cryptojargony and so it was great for DeFi natives for people that you know day-to-day you know use DeFi they're comfortable depositing into a or whatever very difficult to use for normies very few normies kind of broke through >> uh the pain and onboarded um um and so what we're releasing now is not only is it the next generation of that But more excitingly, the reason I'm excited about it is that it is much more normie friendly. So someone genuinely could not know anything about crypto and should be able to navigate it

and get all the benefits without really having to uh have any familiarity with the sort of the underlying tech. And secondly, it actually allows people to do stuff that they would not be able to do with their traditional uh financial institutions. So in other words, it's not just like recreating what existed before. It's actually using the power of DeFi to let you do stuff that you, you know, you previously wouldn't wouldn't have been able to to do. Which is I mean that's how you get I think crypto adoption is a it has to be normmy friendly and b there has to be like a why there, right? Like okay, I'm pretty happy with you know my Chase account.

Why do I need to use this thing? Uh and so hopefully now we uh you know we have that for for people. >> What is all of that stuff? What's the meat on the bone? what is the cool things that you guys are adding into the ether ether 5 product suite? >> Yeah, so the there's uh a bunch of things. Um uh the first thing is uh I guess the current limitations or previous limitations of EtherFi is uh you could only hold a pretty small number of select crypto assets like you could hold stable coins, you could hold USDC, USDT, you could hold ETH, uh you could hold like you know a wrapped version of of uh Pipe and Bitcoin, very cryptoy assets. uh we are now changing

that to where you will now be able to hold uh tokenized stocks. So a huge range of tokenized uh stocks. Uh you'll be able to hold metals. So gold, silver, all that uh great stuff along with pretty much any token uh that you want, any like any of the uh majors that you'd uh you know you'd want to hold. So it really is now becoming not just a general uh you know crypto wallet uh but can you know wrapped in a a smart contract safe but you you can actually just hold any you know any of the more trady the tokenized trady assets. So that's pretty exciting uh first you know first time I think cryptonia bank has allowed people to uh to do that same benefits same non-custodialness

uh uh you know goodness. Um the second thing that we're uh we're adding is an AV v4 an integrated AV v4 market. So what that means is uh twofold. One any any you know stables that you deposit now earn uh yield if you choose to to opt in. Uh so now you deposit your USD, you're just going to be getting two or 3% interest on it because it'll just automatically be uh loaned out uh for you. Um, so that's a higher rate than you you get from your your bank uh typically. And uh you can actually take out loans against your entire portfolio value. So basically imagine a bank that looks at like what's in your checking

account, what's in your crypto wallet, what's in your, you know, your brokerage account, package it all together and effectively give you a line of credit uh that you can now from this this a market that you can now borrow um at I think what I think is going to be a very competitive uh uh interest rate. Obviously, it's dynamic because it's uh you know, it's a it's a DeFi uh market, but I think it'll be better that it's certainly better than any loan you can get in uh in Tradfi. And then when you take out that loan, you could of course do anything you want with it. You could spend it, you could loop. In other words, you could, you know, put some spy like S&P 500 uh tokens in there, take out a loan, buy some more tokens, do all this stuff that you do in DeFi, but now

with with Trafi Assets, which is super exciting. Uh and then uh the other big thing is like super comprehensive uh fiat rails uh very broad network support. So in other words, now you'll be able to deposit from from Tron, from Solana, from Tempo, from whatever. So you'll be able to just deposit from from anywhere. And we're going to support I think like 70 different currencies. So basically, you know, your Indian rupees, your Colombian pesos, anything you want, you'll be able to do in and out with uh really like either no fees or lowest fees on the uh on the market. So now you can literally you can deposit your salary. You'll have a named account.

Deposit your salary into Etherfy. It goes into your non-custodian account, buy your tokenized stocks, your metals, take out loans, basically do everything. and get a credit card, great great cash back, everything that you normally do need to do for the bank. But now you're a global citizen. You're not uh you know tied down to uh uh you know a particular financial institution or uh uh or you know government regime. >> Self custody won, but it still has a usability problem. A seed phrase on paper is still a single point of failure. Phones get lost, devices break, backups disappear. Bit key is a self-custodial hardware wallet built for that reality. It uses a two of three multisig with keys split across your phone, the bit key hardware device, and

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as a whole is in its arc. The the Gen 012 that you explained for EtherFi where you started with one a primitive and at Banklist we really like our money verbs. The first primitive that you started with is saving. We allowed you to get yield on your ether. yield layer. You can call it like the the bond layer, the savings layer, the savings primitive. That was the first money verb that Ether really pioneered with uh the whole like LRT movement. It expanded, it evolved, a new layer came on top of that that is spending. So with the integration of stable coins, an asset that came to Ethereum, uh and the EtherFi card, you

could add a new money verb into the EtherFi app. Now you can also spend. So you can save, now you can spend. And I think with this Gen 3, this new evolution of the EtherFi financial uh experience, you get to add a few more two more money verbs come to mind. Invest. You get to invest now inside of the Ether app. You can buy tokenized stocks. You can buy gold. Uh and then you can also margin or or get a loan. Margin, I think may maybe margin's a verb, whatever. Um >> uh and so now you can also get a loan.

And so we are adding on the money verbs into the etherf financial experience like the neo bank plus experience. And why I think this is important like I think maybe cryptonators might have listened heard you just now and be like Mike why is this exciting? I've already been able to get an a loan. I've already been able to buy tokenized stocks. It's not for you. It's for the rest of the world. It's for everyone else who is still stuck inside their like non United States financial system that don't have these opportunities and need a bundled product, seamless bundled experience to come together in order to get them and break them free from their bank. And so with all of these things all being put

together, it's illustrative to me of all the primitives of Ethereum that have grown up and become pretty mature one by one by one. This seems that according to etherfi that the tokenized stock primitive on Ethereum is ready for mainet is ready for like deployment into a consumer app and we can scale that out to the rest of the world and not only that but also so is margins and loans as well and all because all of this is in one place on Ethereum like Ethereum is the super app it's easy for etherfy the neo bank plus to wrap up the Ethereum experience and sell it to the rest of the world. So I think I think with that

framing I want to throw that back to you because I think again if a listener was just listening to you was like we've had a for years Mike like no no no no this is now a seamless unified financial experience being like bundled up and being offered to the rest of the world by Ether. I'll throw I'll throw it back to you. Yeah, I the way I would describe it and I'm I'm probably overstepping a little bit here, but like think of it as like the first non-gambling cryptoconumer app. If you think about like all the cryptoconumer apps, because there there are lots of them, right? You know, there's pump fun, there's, you know, whatever, even centralized exchanges. Uh like you just have like casino version one, casino version two, casino, it's just like casino with different like window dressing, you

know, like poly market. Oh, gamble on the weather now. Okay. um like and and that's it's super profitable, right? Like the casinos make tons of money. Gambling especially in you know in a gambly type type market uh is it's a huge industry and it's it's very profitable and uh the ease of creating these you know casino variations and launching tokens which again in itself is you know like a microcosm of okay we're launching a little gamble unit that we then get to you know take a rake off of. That's what memecoins, you know, basically were. So, um, that basically sucked all the oxygen out of like the real because like any builder going

into crypto was like, "Okay, do I spend, you know, 5 years building like a real consumer product and it's hard and you could tell our token like our our business is 100 times better than it was when our token first launched, but like the token's in the gutter." You know, we talk about things we're doing to improve that as well, but like it's it's really hard. like it's way harder to build a real product versus like build some other gambly thing. Um, and so it sucked all the oxygen out of the the real, you know, the real economy on uh on on the blockchain. Uh, and just didn't leave any room for this this kind of stuff. and but you know being uh just I don't know pigheaded or whatever we just said no we're actually

just going to build a real consumer app uh that's usable dayto-day that actually helps people in their day-to-day lives um not about gambling not about speculation but or personal finance um and just like grinding away for years like it's been three years you know uh it's uh and we're I mean we're still not even close to you know where uh where it needs to be. So like that's that's why I think this is important because this is you know the first version of the product that I can see at least tens of millions of users uh using you know the v1 of it was like okay it's it's good for crypto people maybe a few hundred thousand uh users but this version with the fiat easy fiat you know on and off ramps and like all these integrations I

can see tens of millions of people uh using it and then there's a version you know version further on that a billion people might uh might actually be able to do. And once you have like these large businesses that, you know, create value, generate uh lots of revenue, that's [clears throat] going to create um an ecosystem that brings other players uh uh in. And then I think at some point there's going to be a tipping point where the gambly nature of the crypto universe becomes like a you know, a little 10% sliver rather than this sort of 90%, you know, uh sleeve that uh uh that we have today. I want to learn a little bit more about the specifics behind each of these two primitives, the invest and the margin primitives. Let's

talk about the tokenized stocks element. Uh how are you deciding? How is the etherfy deciding what tokenized stock provider or what tokenized stocks show up in the app? Uh how are you like displaying that? What choices have you made? Who's the service provider in the background? Just fill in some of the details there. >> Yeah, that's a that's a great question. So I mean first of all it will be permissionless. So you you'll be able to I'll I'll talk about the way it'll be, you know, soon after uh versus what it is today. Eventually, I mean, you'll be able to use Island, you'll be able to use X stocks, whatever is on Ethereum.

Anything on Ethereum, you'll be able to uh to use it. Day one, we're launching with uh with Xtocks. Um a lot of reasons for that, honestly. It's just we we have a good relationship and had a good partnership with those uh folks. Uh so so we're launching with Xtocks being the uh the primary uh you know the primary option uh there and then there'll be a number of um um you know commodities so tokenized gold uh assets that are available as well. >> Do you guys like kind of opinionatedly show like Xbox and or like the tokenized gold assets more than like others? Yeah.

You just like are selecting like here are the quality ones that we feel comfortable like not selling but displaying giving the option to buy to our users. >> Yeah. because we need to make a choice about which ones are enabled as collateral >> on the A market. And so that's the choice that uh we're making is there's a risk curator that's making those decisions and then and then there's a bunch of like wiring that needs to be done for liquidations and uh um you know uh setting the risk parameters on each of these assets. So So that's kind of the choice that's being made.

>> I see. Okay, let's go into the A side of things. Talk to me about the A spoke model. We've never done an episode on a spokes, so I think we would need to help understand like what that construction means. So, walk [clears throat] me through what that is and we can get into some of the nitty-gritty details after that. >> Yeah, so a is a before the new iteration of a that, you know, they've recently released that's, you know, growing really nicely. um is a very flexible system. Like you could you could create these isolated markets where you only you know borrow and lend one asset versus another. Um uh we're using it in a at least for now in like a a pretty uh uh simple way where it's one uh market.

you you know all your portfolio stuff goes into this one uh market and we just uh we uh set risk parameters and thresholds around each asset uh uh in terms of what you can do with it. And this market is very much not uh meant to be used the same way that other a markets or other DeFi lending protocols have been used. Like what I mean specifically is other DeFi markets are very DGEN heavy. So it's like okay you can like lever up 10x on this market. You can like loop you know your assets you know super aggressively you you know take it all the way right up to you know the the limit and then if the price changes by a few percent you get

liquidated and it it's very like aggressive um >> um and you don't want that because you don't want to be like too far on the in the operations of risk management. You are going to do risk management but that's not your that's not your specialty. you're going to like keep it a little bit more moderate. >> It's actually that's actually not the reason. I mean, we certainly could do the risk management to I mean it's it's clearly worked right for uh like obvious worked across like pretty insane market conditions. No, we we just don't want our users to get wrecked like uh an exchange like a centralized exchange or or pump fund or whatever. And I, you know, I mean, I'll stand by this. Like it's a

wood chipper. Like you just feed users into it and they just all of them come in. Everyone loses money and they just like, you know, they they get wiped out and they go and they earn a little bit more and they put some more in. It's just it's a casino. Like that's the business model. It just feed the users into uh into this machine and like we we go out of business if we do that. We cannot do that. we need our users to stay uh solvent uh and like make reasonable decisions. So with Ether, I mean, we've had a much more limited uh you know, ability to borrow for for your your card against like this uh against like ETH and like other basic assets. Um in the entire time the you know been we've been around like the amount of uh

assets liquidated is like a few thousand dollars. So, like this is out of like I think $200 million in these vaults, we've only ever had to liquidate a few thousand dollar worth of assets. Like that's and that's a win. Like we we could have like dialed up the risk profile and like we would have made tons of money on liquidations, but like then we you know wipe out our own users. So So this market is very meant to be much more conservative. No 10x leverage and and in fact there's two the difference with this market versus others is there's actually two thresholds. one threshold above which it will not let you borrow anymore or spend anymore and then a much higher threshold where you get liquidated. Whereas in other markets there's just one threshold just keep

borrowing all the way to the end and then if you you know click over your uh you get wiped out. In our case we you have like one conservative threshold uh where like even a 40% price move won't like won't kill you. Um and then another much more aggressive uh threshold where you get to actually liquidate. So it's just a different use case. We're like we're not looking for people to come here and like you know lever up and you know go max max DGEN. This is really meant to be like a a personal finance uh uh tool. >> So as assets flow into this a uh uh what is it called? Not a not a spoke spoke.

It's another a spoke >> hub. It's a hub and then there's there's going to be multiple spokes coming out of it >> to start with just one. >> What are the what are the spokes then in that case? >> Well, for now just one. There would just be the one main spoke. Um >> because it's been launched on optimism. Um we we've talked about them about launching another spoke specifically dedicated to more DeFi activity on optimism. I think I can say that. >> Okay. Okay. Uh so like say say my I'm an Ether user. I have I'm buying I'm buying some stocks, got some Tesla, got some gold. Now I have like a line of credit because of this a market and so I borrow some money. Who is lending me that

money? Who's on the other side of that borrow lend uh equation? So either other users who are depositors in in this ether market um or well I guess other users is the short answer. So they can be anybody in the world can deposit into the market. So it's totally permissionless. for basic cash users >> uh or or anything. I mean you deposit it's just an open market. So uh you can be a cash user, an etheri user or anybody. You can be a financial institution looking to earn yield in like a pretty low risk um market. Uh so anybody can deposit. Um uh borrowing is limited just to cash uh users. So that's sort of the the idea. So you're

borrowing from a wide variety of uh uh depositors. We have a few partners that are actually going to be depositing um some of their treasury as sort of a way to help facilitate the growth of the the markets. So there's going to be a variety of uh uh players that participate. >> So Ether is using a V4 to be like a matchmaking platform for its own users for borrowing and lending. So it's like a what a bank does but doing it bankless. >> Yeah. Exactly. That's exactly right. That's I mean a bank gets together, takes your deposits, you know, gamles it on mortgage bonds or whatever in some opaque black box and then every few years they get bailed out. In this case, you know, it's fully transparent. You

can choose to participate or choose not to participate. But if you choose to participate, you deposit, you earn a bit of interest uh and then other users can use that to uh uh to take out a loan and you know do whatever whatever they want to do. >> Is this a new revenue line item in the EtherFi P&L? like this makes money for Ether. >> Yeah, for sure. So, both the uh swaps on on assets makes uh makes money and this lending market uh also makes money. >> Okay. Okay. So, you you take a little bit of the fee of of the lending yield and then when somebody >> the same as [clears throat] a you know any a market there's always a >> right a sharing some of their economics with you. I'm sure a gets a little bit

too. >> Yeah, that's right. I think this is public. There was a you know a governance proposal. So it's 8020. So Ether keeps 80%. AI gets a 20% rev share for the uh the infra. >> Cool. And then the the swapping feature, how how does that actually work? Is that uh is that whose software is that? >> Um it's uh yeah, it's pretty sophisticated. It involves a a number of remote vaults that are integrated with your primary vault on on optimism. Um and uh anything that's deposited whatever I'm going I'm nerding out here. Um in terms of the specific partners we use uh we primarily are using a a partner named ENSO uh and they uh they are doing a lot of the

routing and uh uh optimal uh you know optimal routing to give you the best price on your swaps. And the prices you get are actually really great. I mean, in many cases, you'll get a I I maybe even I can make a strong statement that in most cases, you'll get a better price on this than you would get in like a centralized exchange or uh or just randomly doing a swap on chain. Um it's uh yeah, it's pretty uh it's pretty great and it feels we're working really hard to make it feel instant. Like this is why people, you know, use centralized exchanges is you go in, you tap once and you're done and it's it's instant.

Whereas in DeFi, you know, it's like a one minute ordeal. Uh, right to to do something. Uh, this is really meant to feel uh, you know, as as good as in a centralized exchange. >> Talk about the rollout plan for this uh, gen two of Etherfy. How how we are at A. How do we get to B where it's like fully released? Everyone can get their hands on it. Talk about the details there. >> Yeah, so everyone can get their hands on it. It's it's live. Uh already Yeah. As soon as we announce it, it's it's live. Um yeah, we're not doing like a >> pre-announcement and then No, it's just it's live. You can use it. Um new users immediately get in. Existing users will be sort of uh rolled into it uh over a

period of uh uh I mean like a week or or two. So if if you're an existing account holder, you'll slowly kind of have it enabled, but new users get it um immediately. >> Where does the product go from here? So you've got these two new primitives into the EtherFI app. Uh are there next steps or is that just like too soon to talk about? >> Uh I mean there's there's so much stuff that we're doing. Um so there's so we're calling this release Ether Summer. Yeah, whatever. It's just a goofy goofy name. Uh we're we're going to be doing these like packaged releases probably at least three times a year. So instead of just like releasing like little features here and there, we're going to try to sort of have more, you know, themes and like uh I think this is this actually inspired a

lot by what um uh founder of Airbnb had this uh uh now very famous speech called founder mode and he talked about how they organized and structured their releases and uh so we I was really inspired by that. So we're kind of following that model. Uh anyway, so next release is going to be called Ether Autumn. Um it there's going to be a lot of polish and improvements uh that uh that we're we're doing there including um both summer and and autumn uh we'll have a much more normie friendly brand which is just like the way we talk about the product the way the website looks just much more normie friendly. Uh previously you know Ether just is like still very like DeFi feeling.

>> Um and then the other big thing for Autumn coming up is going to be a lot of what we call sort of a social uh layer. Uh I won't maybe spill the beans too much on exactly what the features are going to be, but it's just going to make it much easier for you to to collaborate and and uh you know uh interact uh uh socially, I guess, fin in a financial sense with uh with others. And we're doing some uh uh some cool stuff there. again stuff that you couldn't um uh like I'm sort of spilling the beans I guess a little bit here but like imagine you could [laughter] just like >> yeah um like if you want to send someone money with like you have a Chase bank account you want to send somebody money

right like they they need to have a bank account they need to have something to receive it and imagine you could almost like just send somebody a fully functional account like you send somebody 10 bucks and they just like they open the you know uh the the message or the the the money that you send them and like okay they now have a fully functional account. They can literally they can go spend it. They could send it to somebody else. It's like you've literally like taken this like concept of like a unit of money and just like it now is like self- sovereign so to speak. You can like send it to somebody else and now you know your your grandma in India or whatever can now go and like use that to buy stuff. um uh which again is sort of taking this idea

that look with DeFi you can just do things that are impossible in Tradfi and we're going to like really double down on that because I just think that's when the magic happens and that's how you actually get people to re you know replplatform. When Ether started, we were in a much different place in Ethereum and with stable coins than where we are today. Like, this is before TRFI got all horny over stable coins. Do you lose use a terrible word? Uh, and now like stable coins and on-ramps have also just gotten more sophisticated.

talk to me about the on-ramp ecosystem and how it's improved and what solutions it maybe has provided for you, but also what problems you guys still have at EtherFI with on-ramps and off-ramps. Yeah, like they went uh I guess eventually maybe they'll converge on something that's that's good. Look, um yeah, play rewind the clock like two years. Yeah, there were some crypto on-ramps, but they were just horrible, right? like 3% 4% fees super slow you have to KYC you know multiple times over to to do anything your account would get banned you know randomly all over the place the world we are today is there's now enough uh aggregators uh that are

out there that can like create a a somewhat smoother experience like the KYC is less painful instead of 4% maybe you're paying like 25 basis points uh you you know, like it's less bad like reach is a lot better, you know, currency support. Um um my honest take is that like it's just a question of when uh you know we we get there is if you're really serious about this, you got to fully vertically integrate the stack. like you can't you can't just package up a bunch of integrators because it just it is both expensive because like every layer takes a fee and it just doesn't create a good experience because like you know the sort of KYC

data sharing boundaries always create you know tons of user friction. So I think anybody and there will be many not not just Ether but anybody who's serious about this is going to fully vertically integrate all the way down to at some point having a bank charter in one or more uh regions. Um >> does that mean that you guys are just kind of navigating around the on-ramps and you guys are just getting banking relationships directly? Is that what's going on? >> Yeah, that's the end game. I mean that's that's for sure the endgame. Um you know that's and look actually that's not the end game. The endgame is great. You have this beautiful seamless experience and then you sort of open up a parallel, you know, payments uh array where it just

it's cryptoto crypto. You're not even going through the trady system. The merchant has a POS, a point of service uh you know, terminal, you you you know, you tap uh your crypto payment thing and it just exchanges stable coins or or crypto assets directly. uh now it's very hard to do that in a compliant way and all that but then you're really like that that's going to be super seamless. I don't think it is and maybe I'm wrong but because there are people that are trying to do this already. I think wallet connect is trying to do that.

Even Circle was kind of going down that path a little bit. Um, but I think the level of uh adoption needs to be much higher like with even with 10 million customers unless they're all in the same like city almost >> it's just not enough you know you don't have enough scale like even if you're AMX scale like that's just like you know that's barely there right ammex I think is 100 million accounts something like that um like that's maybe just enough where you can have the sort of the lounges and terminal uh integrations where like a a merchant whether online or you know or or retail is going to be willing to make the investment and deal with the hassle

of integrating yet another you know thing. Um so uh I think that's the endgame. The endgame is pure cryptoto crypto is it's just but I think that's like couple years out at least. >> Right. Right. Yeah. We need complete crypto ubiquity for that for the on-ramps to become just obsolete and invalidated and irrelevant because we're all staying inside of the crypto ecosystem. I think that's what you're saying. >> Yeah, that's that's right. And then you know at that point you're um you know the power dynamic between individuals and and governments really changes dramatically because [laughter] when you have >> let's go >> you know >> I mean when you have like an asset that's unseas because right now look we're still transacting in like dollars

right and um stable coins are a lot more free than uh you know bank deposits um but it you know it's you're still transacting in dollars those dollars are inflated uh the they can be seized. You know, it's much more difficult to do it, but they they they can be. But like when people are truly transacting peer-to-peer, I mean that's uh it becomes really hard to fund, you know, forever wars by printing money, >> right? Um >> Right. This is the original crypto bitcoin vision. Yeah.

>> Yeah. And so it's, you know, it's a you have to build quite a tower to to get there. But for at least for the first time, we can see >> we can see what the top of that tower looks like. Whereas, uh, you know, a couple years ago, it was like, how do we get from here to like something that, you know, normal humans actually, uh, actually use? I've been trading crypto for almost a decade and I've used so many different wallets, exchanges, aggregators, different frontends over the years, and I'm always kind of looking for the same thing. Just one interface with deep liquidity across a bunch of chains and assets where I can access all the markets like pers, earn yield, trade confidentially, and still control all my own funds. And I've never really found this experience. [music] And I'm always switching wallets,

juggling gas fees, and just getting eaten by slippage. Near.com is not [music] that. It feels fundamentally different to me. I can do everything I want from any chain and I keep all my activity confidential. I can even earn yield confidentially. It's the way crypto should work. The near.com wallet is powered by Near and it's moved over $25 billion crosschain using postquantum signing and has run over 5 years on mainet with zero downtime. Near.com is simply the best way to be onchain and be in control. Get 20% of your trading fees back using the bank list link in the show [music] notes, not investment advice.

>> Some exciting news. We are launching a new podcast to help people figure out the crypto cycle, how to navigate it. The best crypto cycle investor I know, his name is Michael Nato. He runs the DeFi Report. This is the guy that sent me a sell alert before the 1010 price [music] drop happened. His cycle analysis has been absolutely on point. I've been following him for years and this year we started recording weekly podcast episodes. Each one we get into his portfolio, what he's holding, the market structure, entry targets, fair market value of Bitcoin and Ether, and where we are in the cycle. There's new episodes that are released every Wednesday. They're 30 minutes. They're short. They're punchy. I think this crypto cycle is harder to navigate than most. So, let's do it together. Go subscribe to this podcast. Search the DeFi Report wherever you get your

podcast. [music] YouTube, Apple, Spotify, or find a link in the show notes. There's a new episode waiting for you. Now, >> you talked about updates to the EtherFi uh token as well. Um let's let's talk about a little bit about that. What's going on over in the token world? Yeah. So we um there's been a lot of debate uh you know back and forth around token uh value acral and you know and we've participated to some degree and that we had buybacks uh previously. Um uh what we're doing now with with ETHI is doing what what we're calling programmatic buybacks. So basically every action within the product now has a portion that generates revenue has a portion of that that programmatically goes to buying back ETHI. And so now it's not so

much this sort of discretionary thing you know how much is it going to be uh you know uh this month or or next month. It's just baked into the protocol in a in a programmatic way. Uh which we think should create a lot more confidence in terms of like what is this token for? What's the value? like how does it connect to the the health of the you know the the protocol and the uh and the company. Uh I think um well others have done this kind of thing uh before and that's almost like the only instance where buybacks have actually worked is in cases like hyperlquid like I guess pump fun um I think is doing something similar um where it's just baked into the into the product and so that creates a level of trust and confidence for

people that uh you know want to hold the uh the asset. Does that also give people a bit of a view into the actual financials of Etherfy because you can like back your way into the data, right? >> Yeah. Well, that's always been the case. I mean, all our transactions, everything's on chain, so there is no um >> Right. I suppose uh suppose like the interchange rate specifically and a few other brand but we we generally are pretty transparent about that with we do these analyst calls at least quarterly um where we just give a full you know transparent view of where things are at um >> it was never a secret it was always open >> yeah that's right I mean it's kind of hard to to uh to keep it >> aside an onchain business yeah

>> what about privacy with Ether I suppose like as Ether gets more and more users and more and more transaction volume comes into the Ether app, privacy becomes a bigger and bigger issue. >> Yeah, absolutely. Um I mean look what would be so nice and this is where you know it would be nice if the Ethereum uh uh protocol was focused on exclusively on this kind of stuff. It would be nice if privacy was just built into Ethereum. Um um we are working with optimism to roll out a privacy layer on Etherfy that should uh uh uh hide uh like some of the basic information information like balances and and transactions. Um I mean at this point it's not like they're

public, right? It's like anything in DeFi like yeah if you know the wallet address but um that requires you know doxing and obviously you just see the number the quantities you don't know what you know what the person is buying or where or anything like that. So uh so there's you know there's a level of privacy but we want to take it uh you know uh to a next level where where everything is uh is private by by default. Again, I mean, this is I think one of the most valuable things that Ethereum could do um at the network level is integrate a true privacy layer that uh that works. But in the meantime, as I said, we're working with Optimism to just roll that out as an additional feature uh that uh that we'll have.

>> Mike, this is all my questions. This is pretty exciting. As I kind of said, I do see Etherfy as a canary for Ethereum at large. G3 is kind of just like wrapping up the Ethereum super app into a consumer product and selling it to the world. Uh which I mean it's it's bullish that we've gotten this far. We've got spend, we've got save, we've got invest and margin. Uh what's the next verb do you think that will come into the EtherFi app? >> The next verb? Ah yeah, that's an interesting way to think about it. Um I wonder if there's some social uh element that that could be turned into a financial uh you know verb. Um Maybe that's pro that's kind of the direction where it's going. Yeah.

>> Goth. >> Yeah, there we go. Um, yeah. No, I think like I think it's exciting. I hope uh I I mean I hope other and I'm sure other people will uh try to replicate uh this and uh that'll be good because like this is a you know just neo banking forget banking just neo bankanking is a $300 billion revenue industry today. Uh that's I don't know about 300 times larger than DeFi today. Um like that's the opportunity. Um all this gambly that we're doing is uh a distraction uh really. So uh the sooner we can get past that, the sooner I think the the actual benefits of crypto uh start to occur.

>> Mike, congrats on the release. I hope the best for you guys. Uh thanks for coming on the show and telling me all about it. >> Great. Thank you. Bation, you guys know the deal. Crypto is risky. You can lose what you put in. But the institutions are here. So, we are going even further west. This is the frontier. It's not for everyone, but we are glad you're with [music] us in the bank's journey. Thanks a lot. [music]