Founder: Max Kei (CEO)
Date Based: March 2024
Location of Headquarters: Lugano, Switzerland
Web site: https://debifi.com/
Public or Personal? Personal
Max Kei is a builder within the Bitcoin P2P area in addition to a seasoned banker, which makes him uniquely certified to create Debifi, a noncustodial, bitcoin-backed P2P lending platform that primarily serves establishments.
Kei’s work within the Bitcoin area started in 2017, when he first contributing to Hodl Hodl, which rapidly grew to become a broadly used noncustodial P2P buying and selling platform.
In 2020, he helped the trade launch Lend at Hodl Hodl, the primary noncustodial P2P borrowing and lending product within the Bitcoin area.
The product gained traction in Latin America and Southeast Asia, the place it was used to facilitate microloans, whereas the likes of Preston Pysh (now Strategic Advisor to Debifi) took curiosity within the product and famend cypherpunk Adam Again additionally sang its praises.
In response to Kei, it’s the high-quality repute of the staff behind Lend at Hodl Hodl, a few of whom now work on Debifi, that’s attracting customers to Debifi.
“Plenty of lenders and debtors go to Debifi as a result of they know the staff has very intensive expertise,” Kei advised Bitcoin Journal.
“Individuals are happy, as we’ve been via a number of bear cycles and managed to outlive,” he added.
“Now, we’ve taken the idea of Lend at Hodl Hodl and moved into the institutional area.”
From Banker To Bitcoiner
For 10 years earlier than discovering Bitcoin, Kei labored as a personal banker.
He resigned from his place earlier than “going full Bitcoin rabbit gap” on the finish of 2015, partially as a response to an expertise he had with one in every of his shoppers.
“A 12 months earlier than I give up, I used to be sitting in a gathering within the financial institution workplace with one in every of my shoppers and he was exhibiting me his telephone and saying ‘You realize sooner or later sooner or later, I’m not going to wish you as a result of I’ve bitcoin,’” recounted Kei.
The consumer then proceeded to ship $15,000 price of bitcoin to a contact of his in Brazil, in keeping with Kei, who thought to himself that his consumer was insane. Nevertheless, it didn’t take lengthy for Kei to comprehend that his consumer wasn’t loopy however, as an alternative, onto one thing.
“I began doing my very own analysis, and I rapidly realized that Bitcoin is an actual factor,” mentioned Kei.
Kei pivoted to Bitcoin quickly after. Nevertheless, after spending eight years constructing within the Bitcoin area, he’s come to imagine that banks will nonetheless have a job in a hyperbitcoinized future.
“Banks aren’t going to go away,” defined Kei.
“They’ll turn out to be infrastructure suppliers for Bitcoin corporations, for startups, for everybody. They’re nonetheless going to be a spine,” he added.
He realized this when banks and different monetary establishments started expressing curiosity in utilizing the Lend at Hodl Hodl product.
Differentiating With Debifi
Inside months of launching Lend at Hodl Hodl, establishments reached out to the Hodl Hodl staff requesting to make use of the platform.
“They mentioned ‘Hey, we need to be obtainable for bitcoin lending,’” recalled Kei.
“However we didn’t need to combine the world of microlending with the world of institutional lending. We realized we would have liked to do one thing completely different. That’s how the idea of Debifi got here into existence,” he added.
In 2022, Kei started brainstorming Debifi. A 12 months later, they raised cash from enterprise capital corporations together with Ten31 and Timechain to construct a minimal viable product (MVP). By March 2024, Debifi was reside.
The platform has been working in beta, and the official model will go reside on the finish of the month. With that mentioned, Kei defined that Debifi is totally practical already.
“Simply because the product is in beta doesn’t imply that it’s not operational — it’s really totally operational,” he mentioned.
And so this brings us to the following query: How precisely does Debifi work?
How Debifi Works
Debifi is each an internet site and a cell app, and the 2 work in tandem.
“We now have a really distinctive worth proposition is that the cell app acts as a key storage,” mentioned Kei. “The cell app turns into a pockets, storing your personal key, however you’ll want to use the web site with the intention to interact in contracts.”
While you signal a transaction, create an escrow for a mortgage, or repay a mortgage, you employ the cell app to take action.
Customers may also decide to make use of the COLDCARD units (the Mk4 or the Q) instead of the cell app, and Kei hopes so as to add help for different {hardware} wallets as effectively.
“We need to help Jade from Blockstream, Ledger units, Trezor units, the Basis Passport, and BitBox — all these good names — as a result of we need to present flexibility for our clients,” defined Kei.
The collateral for Debifi loans is escrowed in a multisignature (multisig) pockets that includes 4 keys, three of that are wanted to log off on transactions.
“At Debifi, we now have a singular multi-signature setup,” mentioned Kei. “All loans are held in a 3-out-of-4 multsig pockets, whereas the usual is 2-out-of-3.”
The borrower, the lender and Debifi every maintain one key, whereas the fourth is held by AnchorWatch. Kei claims that having a fourth key held by a reliable establishment like AnchorWatch will increase safety dramatically.
“With two establishments holding keys, even when the lender’s and borrower’s keys are in some way compromised, you continue to have to get yet another key,” mentioned Kei. “If we take away AnchorWatch and go along with a easy 2-out-of-3 mannequin, then we’d find yourself in a state of affairs the place attackers have two keys and the attacker doesn’t want a 3rd key.”
Debifi loans are overcollateralized (compelled liquidations happen if the worth of the bitcoin collateral drops beneath a sure stage, which varies based mostly on the settlement between the borrower and lender) and the typical APR is simply above 10%.
Kei defined that his staff’s analysis has proven that many are prepared to pay the upper APR for noncustodial loans.
“Some time again, we talked with 300 Bitcoiners and we gave them a quite simple choice: You’ll be able to borrow custodially at an 8% rate of interest or you’ll be able to borrow noncustodially at 11% or 12% rate of interest,” he defined. “91% of individuals mentioned that they would favor to carry their keys.”
Customers can take out loans as much as $1 million through the platform and the mortgage durations vary from three to 12 months. As of April, this can increase to 24 months.
Customers can borrow in U.S. greenback stablecoins, U.S. {dollars}, euros, and Swiss francs, and Debifi is engaged on including British kilos, Brazilian reals, and Mexican pesos to that checklist.
Debifi monetizes via origination charges, which it takes from the collateral put in escrow, and it has a dispute decision staff that helps to resolve mortgage reimbursement points and different issues.
What’s Subsequent For Debifi
As talked about, Debifi simply introduced on Preston Pysh as a strategic advisor in efforts to assist the corporate with networking and publicity. Pysh can even present recommendation on methods to enhance Debifi’s product.
The corporate additionally plans to associate with Blockstream’s Asset Administration (BAM) division. BAM will make the most of Debifi as a technical supplier for establishments trying to supply bitcoin-backed lending merchandise.
Past that, Kei famous that numerous different necessary partnerships are within the pipeline as effectively, and that Debifi will announce them within the coming months.
And he concluded with a pitch to all of the establishments on the market who could be focused on working with Debifi.
“Debifi helps you plug and play within the bitcoin-backed lending world as an establishment,” mentioned Kei.
“We offer you all the mandatory infrastructure. We’ll onboard you, and we’ll information you with personal help. We’ll offer you all the mandatory instruments,” he added.
“Successfully, we’re going to be like a one-stop store. Not solely do you not must construct these things as a result of it’s already there, we deliver you the purchasers, which we assist you to talk with straight. And the very best half is that as a liquidity supplier, you don’t pay us something. Zero.”
It’s arduous to not argue that Kei and his staff are onto one thing right here.
