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Who needs an exit ramp? Ether.fi Designs a Visa Card for Cryptocurrency Degeneration
The latest product from the liquid retaking startup Ether.fi might finally help “paper rich” cryptographic degeneration turn their blockchain investments into spending money.
Ether.fi Cash will be a mobile wallet and Visa credit card that borrows USDC, the popular dollar-pegged stablecoin, against your decentralized finance (DeFi) investments and can be repaid directly via cryptocurrency.
“Our mission is to create a suite of integrated apps that make DeFi actually usable for regular people,” he said Ether.fi founder Mike Silagadze. “Cash is your spending account, with the dream of never having to leave” the blockchain. “Off-ramping” refers to the tedious (and fee-laden) process of converting between cash and cryptocurrencies.
Today, Ether.fi is the best known as a service to channel resources into EigenLayer, based on Ethereum reformulation giant that helps investors secure emerging blockchain services in exchange for rewards. EigenLayer has collected approximately $18 billion worth of deposits over the past year, with more than $5.5 billion coming from users who initially deposited their money into Ether.fi in exchange for eETH tokens – a kind of receipt on EigenLayer deposits that can be traded in cryptocurrency markets like any other asset.
In addition to his “Stake” program, Ether.fi also has a “Liquid” program, where users can deposit their funds into vaults that follow manually curated trading strategies.
Ether.fi ATM card holders will be able to borrow funds against their shares or liquid deposits and use the interest from such investments to automatically pay off their bills. Alternatively, users can convert assets directly into USDC, allowing for immediate settlement.
With Cash, “once he got on Ether.fi and then you never have to go off the ramp again because you can save, invest and spend all your money,” Silagadze said. “You can get paid in cryptocurrencies 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 legacy 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 regular credit cards.
Cash is not the first step towards a cryptocurrency-based card, but Silagadze insists that previous attempts to create similar products have turned out to be “rubbish”.
“Most of them are Visa debit cards,” he said. “Visa debit cards are useless because you can only use them for, say, 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.
It expects Cash to roll out to consumers starting in September, but is unlikely, for regulatory reasons, to be available in some large markets, including the United States.
The use of cryptocurrencies as cash will always have its unique complexities, from market considerations to tax implications.
“Initially, it’s meant for cryptocurrency natives,” Silagadze said, “But if someone is thinking about becoming a real degenerate, watching something like this might make them think, ‘Okay, this really helps me navigate this universe.'”