Founder: Max Kei (CEO)
Date Based: March 2024
Location of Headquarters: Lugano, Switzerland
Web site:
Public or Personal? Personal
Max Kei is a builder within the Bitcoin P2P house 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 house started in 2017, when he first contributing to Hodl Hodl, which shortly turned a extensively 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 house.
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 line with Kei, it’s the high-quality fame of the group behind Lend at Hodl Hodl, a few of whom now work on Debifi, that’s attracting customers to Debifi.
“A lot of lenders and borrowers go to Debifi because they know the team has very extensive experience,” Kei advised Bitcoin Journal.
“People are satisfied, as we’ve been through multiple bear cycles and managed to survive,” he added.
“Now, we’ve taken the concept of Lend at Hodl Hodl and moved into the institutional space.”
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 hole” on the finish of 2015, partially as a response to an expertise he had with one in all his shoppers.
“A year before I quit, I was sitting in a meeting in the bank office with one of my clients and he was showing me his phone and saying ‘You know at some point in the future, I’m not going to need you because I have bitcoin,’” recounted Kei.
The shopper then proceeded to ship $15,000 value of bitcoin to a contact of his in Brazil, in line with Kei, who thought to himself that his shopper was insane. Nonetheless, it didn’t take lengthy for Kei to appreciate that his shopper wasn’t loopy however, as an alternative, onto one thing.
“I started doing my own research, and I quickly realized that Bitcoin is a real thing,” stated Kei.
Kei pivoted to Bitcoin quickly after. Nonetheless, after spending eight years constructing within the Bitcoin house, he’s come to consider that banks will nonetheless have a task in a hyperbitcoinized future.
“Banks aren’t going to go away,” defined Kei.
“They will become infrastructure providers for Bitcoin companies, for startups, for everyone. They’re still going to be a backbone,” 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 group requesting to make use of the platform.
“They said ‘Hey, we want to be available for bitcoin lending,’” recalled Kei.
“But we didn’t want to mix the world of microlending with the world of institutional lending. We realized we needed to do something different. That’s how the concept of Debifi came 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 stated, Kei defined that Debifi is totally purposeful already.
“Just because the product is in beta doesn’t mean that it’s not operational — it’s actually fully 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 cellular app, and the 2 work in tandem.
“We have a very unique value proposition is that the mobile app acts as a key storage,” stated Kei. “The mobile app becomes a wallet, storing your private key, but you need to use the website in order to engage in contracts.”
While you signal a transaction, create an escrow for a mortgage, or repay a mortgage, you employ the cellular app to take action.
Customers can even choose to make use of the COLDCARD gadgets (the Mk4 or the Q) rather than the cellular app, and Kei hopes so as to add assist for different {hardware} wallets as nicely.
“We want to support Jade from Blockstream, Ledger devices, Trezor devices, the Foundation Passport, and BitBox — all these good names — because we want to provide flexibility for our customers,” 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 out on transactions.
“At Debifi, we have a unique multi-signature setup,” stated Kei. “All loans are held in a 3-out-of-4 multsig wallet, while the standard 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 institutions holding keys, even if the lender’s and borrower’s keys are somehow compromised, you still need to get one more key,” stated Kei. “If we remove AnchorWatch and go with a simple 2-out-of-3 model, then we might end up in a situation where attackers have two keys and the attacker doesn’t need a third key.”
Debifi loans are overcollateralized (compelled liquidations happen if the worth of the bitcoin collateral drops under a sure stage, which varies based mostly on the settlement between the borrower and lender) and the common APR is simply above 10%.
Kei defined that his group’s analysis has proven that many are keen to pay the upper APR for noncustodial loans.
“A while back, we talked with 300 Bitcoiners and we gave them a very simple option: You can borrow custodially at an 8% interest rate or you can borrow noncustodially at 11% or 12% interest rate,” he defined. “91% of people said that they would prefer to hold 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, it will 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 means of origination charges, which it takes from the collateral put in escrow, and it has a dispute decision group 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 learn how to enhance Debifi’s product.
The firm additionally plans to accomplice with Blockstream’s Asset Administration (BAM) division. BAM will make the most of Debifi as a technical supplier for establishments seeking to provide bitcoin-backed lending merchandise.
Past that, Kei famous that a variety of different vital partnerships are within the pipeline as nicely, 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 likely to be taken with working with Debifi.
“Debifi helps you plug and play in the bitcoin-backed lending world as an institution,” stated Kei.
“We provide you with all the necessary infrastructure. We’ll onboard you, and we’ll guide you with private support. We’ll give you all the necessary tools,” he added.
“Effectively, we’re going to be like a one-stop shop. Not only do you not have to build this stuff because it’s already there, we bring you the customers, which we allow you to communicate with directly. And the best part is that as a liquidity provider, you don’t pay us anything. Zero.”
It’s laborious to not argue that Kei and his group are onto one thing right here.
