Mike Silagadze discusses ETH, re-staking, and building start-ups in episode 238.

This is an article about an exclusive interview with Mike Silagadze, the Founder and CEO of ether.fi, a decentralized, delegated staking protocol for Ethereum. In the interview, Silagadze discusses the importance of self-custody in Ether staking, the future of ETH, and the concept of “re-staking”. He also talks about his background, including his previous experience as the CEO and co-founder of Top Hat, a student engagement software company that grew to have 500 employees and $60 million in annual revenue. The article includes highlights of the interview, as well as a full transcript.The text describes an interview with Mike Silagadze, the founder of Top Hat, an ed tech company. Silagadze explains that he started the company to solve a problem he experienced as a university student – the lack of engagement in courses and content. He also discusses the difficulties of building a business in the education technology space, which he describes as broken and with too much red tape.

When asked about lessons he learned as a founder, Silagadze advises aspiring entrepreneurs to carefully consider whether starting a company is the right choice for them, as it requires a significant amount of time, effort, and risk. He also emphasizes the importance of finding a problem that one is passionate about solving and working with co-founders who have already been through difficult experiences together.The conversation is about the psychological changes that occur when a startup grows from a team of just a few founders to a team of hundreds or more employees. They discuss the different stages of growth and how the role of the founders changes from being involved in every aspect of the company to managing managers and setting high-level strategic directions. However, they also mention that despite these changes, many founders still stay involved in the day-to-day operations of the company, especially when it comes to hiring and maintaining high talent density. The conversation then shifts to discussing the speaker’s move from their previous startup to working with crypto initiatives.The text is a conversation between two people, Mike and Matt, discussing Mike’s experience with cryptocurrency. Mike explains that he had been dabbling in crypto as a side project since 2011, when he bought a few Bitcoins for less than a dollar each from a random guy on a forum. He played around with mining and was excited about the idea of a stateless currency being a new layer of abstraction on top of nation states. However, for a decade, the crypto space was mostly gambling and scams. It wasn’t until 2019-2020 that the first real protocols and DeFi products emerged, which made Mike shift his focus to crypto. Matt then takes a break to give a shoutout to their sponsor, PrimeXBT, before returning to ask Mike to give a quick summary of what he and his team are building at ether.fi.The text describes the creation of a decentralized staking protocol called ether.fi. The founders of ether.fi were previously running an ETH staking fund and realized that the available options for staking involved giving up custody of their ETH, which they were not comfortable with. They believed that Ethereum staking is essential and should be decentralized due to the vulnerability and concentration of the space. Ether.fi allows users to stake their ETH while retaining their keys, meaning they have access to their crypto and can get their ETH back if the protocol gets hacked or node operators misbehave. Additionally, ether.fi is designed to be extensible, with plans to launch a gamification layer called ether.fan. The founders believe in the importance of self-custody in Ether staking and are critical of other existing liquid staking platforms like Lido, which they believe are not truly decentralized and pose a significant threat. However, they acknowledge that Lido has helped to bring more on-chain staking to Ethereum and validated the need for liquid staking. The founders’ biggest fear with Lido is that if one of the thirty node operators misbehaves, it could lead to the whole protocol getting locked up, potentially causing significant problems.The conversation is about the benefits of having more singular stakers in Ethereum, meaning individual persons as opposed to large corporations or groups of people. The consensus is that having more singular stakers would lead to greater decentralization and fewer points of failure. There is concern that a large portion of Ethereum nodes are concentrated in a few data centers, which could lead to a significant outage if one of them were to go down. The speakers discuss an initiative called Operation Solo Staker, which aims to encourage individuals to become solo stakers by providing them with free hardware and subsidizing their internet connection using staking income. In exchange, they must agree to run a validator for at least three years. The initiative is seen as a win-win situation for both the node operators and Ethereum as a whole.The text discusses the concept of restaking in Ethereum and its potential benefits and risks. Restaking involves putting up 32 ETH, or about $55,000, to run an Ethereum node and participate in the network’s consensus mechanism. Restaking makes being a solo node operator profitable, allowing individuals to profitably run just one or two validators.

However, there are risks associated with restaking, such as the potential for a large restaked system to influence the social consensus of Ethereum and the risk of messing with Ethereum’s monetary and incentive structure. The text suggests that further generalizing Ethereum to create a programmable layer of trust is a powerful concept, but it also acknowledges the need to reduce the risk to Ethereum as a whole.

Matt Zahab: Are there any big events planned for the rest of the year for your team? You guys are shipping things at a crazy rate. Obviously, you have your NFT project which will be out by the time this episode goes live. You guys just sort of kicked off “Operation Solo Staker”. I know you guys announced phase one of Mainnet on May 3rd, almost a month ago. Anything else that’s about to happen in the next six months until we get into 2024?

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Mike Silagadze: The most exciting and important thing is ether.fan that I’ve mentioned. I believe the plan is for it to launch in October, but I almost don’t want to give a specific date. The actual Liquid Staking Token, the ether.fi liquid Staking Token, is going to launch. But the most immediate thing that’s happening is ether.fan, a gamified staking project built on top of ether.fi, where users can mint profiles, support Ethereum decentralization, and get rewarded for staking. The longer you stake, the higher your rewards. So it’s a really cool, I think, pretty unique layer of gamification on top of ETH staking.

Matt Zahab: I love that. Mike, what a treat. This has been a great episode. Really appreciate you coming on. Before we let you go, can you please let our listeners know where they can find you and ether.fi online and on socials?

Mike Silagadze: Sure, yeah. It’s ether.fi. And then if you want to look at ether.fan, that’s ether.fan. Super easy. I think on Twitter we’re @ether_fi and @ether_fans. As for myself, the easiest way to find me is probably @MikeSilagadze, but no one’s going to know how to spell that. So just go to ether.fi and go from there.

Matt Zahab: Mike, really appreciate it, man. Truly great episode. I’ve got some homework to do. I need to level up my knowledge in regards to everything staking-related, future aspects of ETH. And of course, I’ll be buzzing on ether.fi as well. I’ll do my best to snag an NFT, but really appreciate you jumping on. Can’t wait to have you on for round 2. Good old Toronto homie coming on the show. We’d love to see that as well. Have fun down south, and next time you’re in the big city, let me know. We’ll grab dinner.

Mike Silagadze: Great, sounds good. Well, thanks for having me on. It was fun.

Matt Zahab: Thanks a lot, Mike. Folks, what an episode with Mike Silagadze, Co-Founder and CEO of the one and only ether.fi. Huge shout out to Mike and his team for making this happen. Hope you enjoyed this episode, folks. I certainly did. If you guys did, please subscribe and show us some love. It would truly mean the world to my team. And speaking to the team, love you guys. Thank you so much for everything. Justas, my amazing sound editor, appreciate you, as always. And to the listeners, love you guys. Keep on growing those bags and keep on staying healthy, wealthy, and happy. Bye for now, and we’ll talk soon.