Founder: Max Kei (CEO)
Date Based: March 2024
Location of Headquarters: Lugano, Switzerland
Web site: https://debifi.com/
Public or Non-public? Non-public
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 turned a broadly used noncustodial P2P buying and selling platform.
In 2020, he helped the change 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.
Based on Kei, it’s the high-quality fame of the workforce behind Lend at Hodl Hodl, a few of whom now work on Debifi, that’s attracting customers to Debifi.
“A variety of lenders and debtors go to Debifi as a result of they know the workforce has very intensive expertise,” Kei advised Bitcoin Journal.
“Individuals are glad, as we’ve been by way of 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 non-public 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 yr 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 understand sooner or later sooner or later, I’m not going to want you as a result of I’ve bitcoin,’” recounted Kei.
The shopper then proceeded to ship $15,000 value of bitcoin to a contact of his in Brazil, based on Kei, who thought to himself that his shopper was insane. Nevertheless, it didn’t take lengthy for Kei to comprehend that his shopper 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,” stated 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 task in a hyperbitcoinized future.
“Banks aren’t going to go away,” defined Kei.
“They are going to turn out to be infrastructure suppliers for Bitcoin firms, 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 workforce requesting to make use of the platform.
“They stated ‘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 totally different. That’s how the idea of Debifi got here into existence,” he added.
In 2022, Kei started brainstorming Debifi. A yr 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 stay.
The platform has been working in beta, and the official model will go stay on the finish of the month. With that stated, Kei defined that Debifi is totally purposeful already.
“Simply because the product is in beta doesn’t imply that it’s not operational — it’s truly totally operational,” he stated.
And so this brings us to the subsequent query: How precisely does Debifi work?
How Debifi Works
Debifi is each a web 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,” stated Kei. “The cell app turns into a pockets, storing your non-public key, however that you must use the web site in an effort to interact in contracts.”
Whenever you signal a transaction, create an escrow for a mortgage, or repay a mortgage, you employ the cell app to take action.
Customers also can decide to make use of the COLDCARD gadgets (the Mk4 or the Q) rather than 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 gadgets, Trezor gadgets, 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’ve a novel multi-signature setup,” stated 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 must get yet one more key,” stated Kei. “If we take away AnchorWatch and go together with a easy 2-out-of-3 mannequin, then we’d find yourself in a scenario 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 degree, which varies based mostly on the settlement between the borrower and lender) and the common APR is simply above 10%.
Kei defined that his workforce’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 may borrow custodially at an 8% rate of interest or you possibly can borrow noncustodially at 11% or 12% rate of interest,” he defined. “91% of individuals stated that they would like to carry their keys.”
Customers can take out loans as much as $1 million by way of the platform and the mortgage durations vary from three to 12 months. As of April, this may 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 listing.
Debifi monetizes by way of origination charges, which it takes from the collateral put in escrow, and it has a dispute decision workforce 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 may also present recommendation on the way to enhance Debifi’s product.
The corporate additionally plans to companion 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 a lot of 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 is perhaps inquisitive about working with Debifi.
“Debifi helps you plug and play within the bitcoin-backed lending world as an establishment,” stated Kei.
“We give you all the required infrastructure. We’ll onboard you, and we’ll information you with non-public help. We’ll provide you with all the required instruments,” he added.
“Successfully, we’re going to be like a one-stop store. Not solely do you not must construct these items as a result of it’s already there, we convey you the purchasers, which we mean you can talk with straight. And the perfect half is that as a liquidity supplier, you don’t pay us something. Zero.”
It’s laborious to not argue that Kei and his workforce are onto one thing right here.