The Free State of Sarhine was an anarchist state run by a conglomerate of pirate lords and captains, for the sole purpose of overcoming the threat to piracy as a sustainable practice, the extremely large naval security provided by Eari traders, often resembling military convoys rather than trading caravans. While Sarhine was successful in this practice in the short term, it proved unsustainable, as the fledgling pirate state was obliterated by the Eari Navy during The Pirate's War Those captured were most likely mass-executed, leaving Sarhine nothing but a barely-remembered island with a moderately deep past.
Even if Eari had not destroyed Sarhine, it was unsustainable as a nation. Already it suffered from heavy infighting, as pirates don't equate to the best soldiers, and their discipline was only kept in check by money, the promise of more money, and the fact that others would hunt them down if they deserted from the force. Their reputation was also a major problem for them with no solution. Even if it wasn't the Eari, it would be another nation, and Sarhine didn't have the best equipment or navy for professional fighting, being swift small ships built for outmaneuvering others and raiding traders rather than actually getting into a proper fight with warships built to destroy.
Even the top ranks of Sarhine were fraught with disagreements, arguments, and infighting. Each of the members of the oligarchy that made up Sarhine thought themselves the superior of the others, and vehemently refused to accept any plan, strategy, or policy that might even hint at being better than theirs, making governance an impossible task.
Sarhine's original populace, which was conquered just 5 months before the destruction of the Free State, suffered horrible living conditions after their takeover. They were made basically slaves, to do all the hard labor for the pirates, and suffered frequent abuses from them. This made for a very unhappy part of the population, which later came to a head after news of the total destruction of the Sarhinian Navy spread to the island. The population rose up, sabotaging defensive positions, killing pirates, destroying gear, and working behind their lines to aid the assaulting Eari. After the fall of the pirate's defenses, and the end of the Pirate's War, the island would be named Sarhine. To this day, a population exists on the island, with many memorials still standing, commemorating those who died to help out the native population.