From revolutionising staking solutions to pushing the boundaries of DeFi innovation, Ether.fi, led by Mike Silagadze, has emerged as a pioneering force in the dynamic crypto landscape. This smart blockchain venture has deftly navigated challenges to blaze a trail of growth in the Cayman Islands. Gain insights into their groundbreaking journey, from overcoming hurdles to envisioning a future where their pioneering products shape the emerging tech ecosystem in Cayman and beyond.
CEC: How did you enter this space? Tell us about your background.
Mike Silagadze: I got into crypto early, purchasing my first Bitcoin in 2011 after reading the Bitcoin white paper. Since then, I've dabbled in various crypto activities, including Bitcoin mining and some programming. However, I only went full-time into crypto in 2021 after selling my previous company. The catalyst was witnessing the developments in DeFi, where real products were being built.
CEC: For those unfamiliar, what's Ether.fi about?
Mike Silagadze: Ether.fi is primarily focused on offering technical solutions within the crypto space. Our initial offering, Ether Free Stake, is a liquid staking product on Ethereum. Essentially, it enables users to deploy their ETH tokens to help secure the Ethereum blockchain while earning rewards in return. It's about empowering individuals to actively participate in securing the network and being rewarded for their contribution, all through a user-friendly platform.
CEC: You recently raised $23M and launched Wrapped eETH and ETHFI on the Bullish exchange. How's that journey been?
Mike Silagadze: It's been exciting. We embarked on this venture in December 2022, and by February 2023, we had secured our seed round funding. The subsequent months were dedicated to relentless development and refinement of our products. When we launched Wrapped Ether in November 2023, the response exceeded our expectations. Within just five months, we witnessed a staggering $3 billion in deposits. This remarkable growth trajectory paved the way for our successful Series A funding round, with Bullish and Coinfund leading the investment along with another 30 or 40 investors who participated.
CEC: Why choose the Cayman Islands as your base?
Mike Silagadze: When I decided to shift my focus to crypto after selling my previous company, I needed to choose a favourable jurisdiction for Ether.Fi. Many entrepreneurs opt to remain in their home countries like Canada or the US and set up a Cayman holding company for tax purposes. However, I didn't find that approach genuine or secure. I wanted to establish the company where it would be based, so I decided to relocate to the Cayman Islands. We explored various options, including the Bahamas and Singapore, but Cayman stood out for several reasons. Its proximity to North America, sharing the same time zone as Toronto and New York, made logistical sense. Additionally, Cayman Enterprise City streamlined the immigration and work permit processes, which, while still challenging, were made a lot more manageable with their assistance.
CEC: How does being based in the Cayman Islands, particularly within Cayman Enterprise City, offer unique advantages or opportunities for Ether.fi's growth and expansion?
Mike Silagadze: There are a couple of significant benefits. Firstly, hiring becomes much easier. Whether we're recruiting someone from South Africa or South Korea, the process, while not effortless, is definitely smoother compared to what it might be otherwise. It's a fairly streamlined procedure that typically takes a few weeks, and then they're granted a work permit. This is a considerable advantage; even in Canada, it's not as straightforward. Being able to bring in talent from various parts of the world is a major plus. Additionally, handling the bureaucratic requirements of running operations in the Cayman Islands, especially through Cayman Enterprise City, is significantly simplified. This reduction in bureaucracy is highly valuable. Without it, we could have ended up spending hundreds of thousands of dollars on legal help just to navigate these complexities. So, it not only saves costs but also minimizes frustration.
CEC: What surprised you the most about living and/or working in the Cayman Islands?
Mike Silagadze: What pleasantly surprised me was the level of infrastructure in the Cayman Islands, considering its relatively small population of around 80,000. Unlike an 80,000-person town in the US or Canada, where it might be quite basic, here we have highways, malls, hospitals, and more. Additionally, the family-friendly environment was unexpected but in a very positive way.
CEC: What's the tech community like in Cayman?
Mike Silagadze: The tech scene in Cayman is still quite young. It's quite small compared to other places. But you know what? That's actually an opportunity. Cayman has a chance to really develop and nurture its tech scene. Right now, it's not big, but we're working on changing that. We're doing our part to help build it up.
CEC: What could Cayman do to attract more businesses like yours?
Mike Silagadze: If I had to pick just one thing that could really make a difference, it would be to establish a top-notch tech-focused university in the Cayman Islands. Imagine a prestigious engineering school right here. It would attract bright, motivated students from all over. Once you have that foundation of talented young minds, everything else falls into place. Within a decade, you'd see a vibrant tech community flourishing. It's all about nurturing the next generation of tech talent.
CEC: How does Cayman's regulatory framework support Ether.fi's success?
Mike Silagadze: Cayman's regulatory process, while still not perfect, is much better than the US or Canada's. Starting a virtual asset company there is a nightmare. In Cayman, though there are hoops to jump through, it's manageable. Clear rules make it a solid choice for starting a business in this field. Regulatory issues aren't a deal-breaker here; they're just hurdles to overcome. Overall, it's a win-win situation.
CEC: What's next for Ether.fi?
Mike Silagadze: Our first product, Ether.fi Stake, allows users to stake their Ether. Our latest launch, Ether.fi Liquid, is an automated DeFi strategy vault attracting nearly $200 million in deposits within just a week. Next, we're rolling out Ether Cash, a credit card and mobile app that lets you spend crypto in real life. Even more impressive, it's designed to pay off its own balance using rewards and returns from your crypto investments. It's a groundbreaking concept, and we're thrilled to make it a reality!
CEC: Finally, what message do you have for potential investors or businesses considering Cayman and partnering with Ether.fi?
Mike Silagadze: Honestly, I'd say it's definitely worth considering. Cayman is a fantastic place that's often overlooked. Many people don't realize it's a viable option, especially if you're in the US or Canada. My advice? Come down for a visit and see for yourself. Cayman has a lot to offer, and it speaks for itself in many ways.
Are you an innovative business on the hunt for an offshore business location? CEC is here to help. We make growing an international business from the Cayman Islands easy, affordable, and functional. Learn by visiting our business set-up page.
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