Founder: Max Inn (CEO)
Date established: March 2024
Head office location: Lugano, Switzerland
Website: https://debifi.com/
Public or private? Private
Max Kei is a builder of the Bitcoin P2P space and a veteran banker, and will grant you unique qualifications to create Debifi, the P2P lending platform for Bitcoin responsible for services primarily to institutions.
Kei’s work in the Bitcoin space began in 2017 when he first contributed to Hodl Hodl.
In 2020, he helped lend an exchange launch at Hodl Hodl, the first non-radical P2P borrowing and lending product in the Bitcoin space.
The product gained traction in Latin America and Southeast Asia, where it was used to promote microloans, but Preston Pisch (now Debifi’s strategic advisor) became interested in the product, and the well-known Cypherpunk Adam Back sang praise.
According to Kei, it is the high quality reputation of the team behind Lend at Hodl Hodl, some of which currently work for Debifi, which is attracting users to Debifi.
“Many lenders and borrowers know that their teams have very extensive experience, so they go to Debifi,” Kei told Bitcoin Magazine.
“We went through multiple bear cycles and managed to survive, so people are happy,” he added.
“Now we took the concept of Lend in Hodl Hodl and moved into the institutional space.”
From bankers to bitconner
For ten years before finding Bitcoin, Kei worked as a private banker.
He partially resigned in response to an experience with one of his clients before “going to the Full Bitcoin Rabbit Hole” at the end of 2015.
“A year before I left, I was sitting at a meeting in the bank’s office with one of my clients. He showed me his phone and said, ‘At some point in the future, I’m not going to need you because I have bitcoin,'” Kei said.
The client then sent out $15,000 worth of Bitcoin to his contact in Brazil. However, it didn’t take long for Kei to realize that his client wasn’t crazy and something instead.
“I started my own research and I quickly realized that Bitcoin was the real thing,” Kay said.
Kei immediately pivoted into Bitcoin. However, after spending eight years in the Bitcoin space, he came to believe that banks still play a role in the future of the hyperbit carp variety.
“The banks won’t go away,” Kay explained.
“They will become infrastructure providers for Bitcoin companies, startups, everyone. They will still be the backbone,” he added.
He realized this when banks and other financial institutions began to express interest in using lending in HODL HODL products.
Differentiate from Debifi
Within months of launching Lend with HODL HODL, the agency contacted the HODL HODL team requesting use of the platform.
“They said, ‘Hey, we want to be able to use it for Bitcoin lending,'” Kay recalls.
“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 about,” he added.
In 2022, Kei began brainstorming Debifi. A year later, they raised funds from venture capital companies, including Ten31 and Timechain, to build minimally produced products (MVPs). By March 2024, Devifi was live.
The platform is running in beta, with the official version coming out at the end of the month. That said, Kay explained that Debifi is already fully functional.
“Just because the product is in beta doesn’t mean it’s not working. It’s actually working perfectly,” he said.
And this brings us to the following question: How exactly does Debifi work?
How Debifi works
Debifi is both a website and a mobile app, with two working in tandem.
“We have a very unique value proposition: that mobile apps act as important storage,” Kei said. “The mobile app stores your private key and becomes a wallet, but you must use the website to engage in the contract.”
When you sign a transaction, create a loan escrow, or pay off the loan, you do so using the mobile app.
Users can also use ColdCard devices (MK4 or Q) instead of the mobile app. Kei also wants to add support for other hardware wallets.
“We want to support Jade from Blockstream, Ledger Devices, Trezor Devices, Foundation Passport and Bitbox. All of these good names – because we want to provide flexibility for our customers,” explains Kei.
The collateral for Debifi Loans is escrowed into a multisig wallet with four keys, three of which must be signed off for the transaction.
“At Debifi, we have a unique multi-signature setup,” says Kei. “All loans are held in three multi-guard wallets, but the standard is not two or three.”
The borrower, lender and devifi each hold one key, with the fourth being held by Anchorwatch. Kei argues that having a fourth key held by trusted institutions like Anchorwatch will dramatically increase security.
“If two agencies have keys, even if the lender and borrower keys are somehow compromised, they will still need to get another key,” says Kei. “If you remove AnchorWatch and use a simple 2-out 2-out model, you could end up in a situation where the attacker has two keys and the attacker doesn’t need a third key.”
Debifi loans have excessive loans (mandatory liquidation occurs; when the value of Bitcoin collateral falls below a certain level, it changes based on an agreement between the borrower and lender), and the average APR is slightly above 10%.
Kei explained that his team’s investigation shows that many people are willing to pay a higher APR for non-custodial loans.
“I spoke with a bitcoiner of 300 a while ago and gave him a very simple option. You can either be detained at an interest rate of 8% or borrowed unconventionally at an interest rate of 11% or 12%,” he explained. “91% of people said they prefer to keep their keys.”
Users can receive loans of up to $1 million through the platform, with the loan term ranging from 3 to 12 months. As of April, this will expand to 24 months.
Users can borrow in US dollar stub coins, US dollars, euros and Swiss francs, and Debifi is working to add the British pound, the real Brazilian and the Mexican pesos to its list.
Debifi has a dispute resolution team that will help you make money with origination fees taken from collateral placed in escrow and help you resolve loan repayment issues and other issues.
What’s next for Debifi?
As mentioned earlier, Debifi brought Preston Pysh as a strategic advisor in its efforts to support networking and advertising. Pysh also provides advice on how to improve Debifi’s products.
The company will also partner with Blockstream’s Asset Management (BAM) division. BAM will use Debifi as a technology provider for institutions seeking to provide Bitcoin-assisted loan products.
Beyond that, Kei also noticed that many other important partnerships are included in the pipeline, and Debifi will be unveiling them in the coming months.
And he concluded on the pitch to all institutions that may be interested in working with Devifi.
“Debifi will help us plug and play the world of Bitcoin-assisted lending as a facility,” says Kei.
“We will provide you with all the infrastructure you need. We will be onboard and we will guide you with private support. We will provide you with all the tools you need,” he added.
“In effect, we’ll be like a one-stop shop. Not only do we have to build something like this, we bring customers in because we’re already there. We can communicate this directly. And the best part is, as a liquidity provider, you’re not paying us anything. Zero.”
It’s hard not to insist that Kay and his team are in something here.
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