Markets
Who needs an exit ramp? Ether.fi plans Visa card for Crypto Degens
The liquid restoration startup’s newest product Ether.fi could finally help the “paper rich” crypto degens transform their blockchain investments into pocket money.
Ether.fi Cash will be a mobile wallet and Visa credit card that borrows USDC, the popular USD-pegged stablecoin, against its decentralized finance (DeFi) investments and can be repaid directly via crypto.
“Our mission is to create a suite of integrated applications that make DeFi actually usable for normal people,” said Ether.fi founder Mike Silagadze. “Cash is your spending account, the dream is to never have to leave” the blockchain. The term “off-ramping” refers to the tedious (and expensive) process of converting between cash and cryptocurrencies.
Today, Ether.fi is the best known as a service to funnel assets to EigenLayer, the Ethereum-based system reprise giant that helps investors secure blockchain services in exchange for rewards. EigenLayer has attracted some $18 billion in deposits over the past year, including more than $5.5 billion from users who initially deposited their money into Ether.fi in exchange for eETH tokens – a sort of receipt on EigenLayer deposits that can be traded on crypto markets like any other asset.
In addition to its “Stake” program, Ether.fi also has a “Liquid” program, where users can deposit their funds into vaults that follow hand-selected trading strategies.
Ether.fi Cash cardholders will be able to borrow funds from their Stake or Liquid deposits and use the interest from these investments to automatically pay their bills. Users can also convert assets directly to USDC, allowing for instant settlement.
With Cash, “you have access once to Ether.fi and then you never have to leave the ramp again because you can save, invest and spend all your money,” Silagadze said. “You can get paid in crypto, and you can just live your life normally without connecting to the TradFi ecosystem. ” Ether.fi aims to offer a crypto-centric rewards program similar to those offered by Chase and other existing card providers. It also aims to differentiate itself from traditional credit cards through its fee structure, which will follow the DeFi market rather than the standard 15-30% APR charged by traditional credit cards.
Cash is not the first attempt at a crypto-based card, but Silagadze insists that previous attempts to create similar products have been “rubbish”.
“Most of them are Visa debit cards,” he explained. “Visa debit cards are useless because you can only use them for hotels and car rentals. You can’t use them for a lot of things. They’re just not practical.”
“This is a real credit card,” Silagadze emphasized.
He expects Cash to be available to consumers from September, but for regulatory reasons it is unlikely to be available in some major markets, notably the United States.
Using cryptocurrencies as cash will always have its unique complexities – from market considerations to tax implications.
“Initially, this is designed for crypto natives,” Silagadze said, “But if someone is thinking about becoming a real degenerate, looking at something like this might make them feel like, ‘Okay, this actually helps me navigate this universe.'”