The Future of Banking Is Being Built on Ethereum

**Mike Silagadze** (0:00)
I'm excited about doing things that you cannot do in in TradFi institutions, and some of that is going to, as part of some of the announcements that we're going to be making in EtherFi summer.

**John Gillum** (0:10)
Everyone knows that crypto can help to bank the unbanked, but what is an on-chain NEO bank, and how did EtherFi become one, and what do crypto users need to know about all of this? Hello and welcome to The Milk Road Show, the podcast that knows that NEO banks are a lot cooler than NEO pets. And that's some stiff competition. I'm your host, John Gillum. Today is Wednesday, July 20th. We will be releasing this episode on Friday. And today we are joined by Mike Silagadze. Mike is the founder and CEO of EtherFi, a non-custodial Ethereum liquid staking protocol launched in 2022 that has grown into a crypto NEO bank, offering staking, yield products, and many other related services. Mike is gonna give us an updated outlook on one of the coolest projects in crypto. So if that sounds good to you, make sure you like and subscribe, share this episode with somebody who's gonna enjoy it. A reminder, today's podcast is free and that would not be possible without our wonderful partners at Securitize, the regulated rails for tokenization. Keep an ear out for more information on them later on in the episode. We're big fans of theirs over here, so support them. And without further ado, welcome to The Milk Road Show. Mike, how are you today, sir?

**Mike Silagadze** (1:12)
Good, yeah, great to be here. Thanks for having me.

**John Gillum** (1:15)
I'm excited to talk to you. There's a lot of big things happening at EtherFi. But before we get to that, I wanted to kind of get an updated refresh for you. I don't want to rehash the whole KelpDAL situation, but I'm really curious. We've had a lot of hacks, a lot of problems in DeFi this year.
A lot of those have been recovered from, though, and I'm curious your thoughts on what is the state of DeFi now and what is your updated outlook on the ecosystem overall here?

**Mike Silagadze** (1:37)
Yeah, look, there's certainly a lot of uncertainty out there because obviously with these AI models being released, people have concerns that a lot of legacy protocols or just projects in general are going to get compromised because of this new tooling that's available. On the flip side of it, that same tooling is, of course, available to projects and the ones that are well maintained are using that tooling to try and find vulnerabilities before they release anything. So it's a bit of a cat and mouse kind of game, but that's creating a lot of uncertainty. People in many cases we've seen have pulled back from DeFi. They're de-risking, they're moving stuff to centralized custodians. But we are starting to see people come back, I think, especially with Fable being released.
At least initially, they're not appearing to be a major wave of hacks. People are getting a little bit of confidence back.

**John Gillum** (2:39)
Well, I'm glad to hear some confidences coming back. My confidence has never been shaken, but I'm curious what your strategy is to try to win institutional trust for a non-custodial protocol like EtherFi. Is there a specific strategy or messaging that you go to for that? How do you go about building that institutional trust?

**Mike Silagadze** (2:58)
There's a lot that we're doing that in many ways is just highlighting all the things that we've already done. Of course, countless audits at this point of the protocols, a lot of security hardening that we've been doing. But we're also doubling down and then just doing a lot more.
One of the things I talked about a fair bit after the CALP hack is that we are going to move away from a lot of the decentralization theater that a lot of DeFi protocols engage in, which is where they make it very difficult for themselves to be able to protect their users, while really not materially impacting the level of decentralization of their protocols. So for example, if a protocol has upgradable contracts, you can put a lot of window dressing on that, but the fact is the contracts are upgradable. And so you just want to make sure that you are able to take action if the protocol is compromised in some way, while preserving some level of transparency and decentralization that frequently takes the form of things like time locks, governance and other procedural things that go into making changes or upgrades.

**John Gillum** (4:17)
Got you. Yeah. And I think that decentralization is great, but theater is not. So I think focusing on real things is a good strategy there. I'm curious if there is still anything going on with DeFi United. In the wake of the KelpDow attack, there was this huge grassroots movement to plug the gap from the hack, and it was really cool to see the ecosystem rally like this. Has that wound down now that the crisis is over, or is there still something going on with DeFi United? Where is that today?