Founder: Max Kei (CEO)
Date Established: March 2024
Headquarters Location: Lugano, Switzerland
Website: https://debifi.com/
Company Type: Private
Max Kei is a prominent figure in the Bitcoin P2P arena and an experienced banker, which positions him well to establish Debifi, an innovative noncustodial, bitcoin-backed P2P lending platform catering primarily to institutions.
Kei began his journey in the Bitcoin sector in 2017, contributing to Hodl Hodl, which soon gained popularity as a noncustodial P2P trading platform.
In 2020, he played a key role in launching Lend at Hodl Hodl, the premier noncustodial P2P borrowing and lending solution in the Bitcoin landscape.
This product saw significant adoption across Latin America and Southeast Asia for facilitating microloans, attracting interest from figures such as Preston Pysh (currently a Strategic Advisor to Debifi) and receiving endorsements from noted cypherpunk Adam Back.
Kei attributes the influx of users to Debifi to the stellar reputation of the team behind Lend at Hodl Hodl, many of whom are now part of Debifi.
“Many lenders and borrowers are drawn to Debifi because they recognize the team’s extensive experience,” Kei shared with Bitcoin Magazine.
“People find satisfaction in our resilience through various market cycles,” he noted.
“We’ve evolved the concept of Lend at Hodl Hodl into a service focused on institutional clients.”
From Banker to Bitcoiner
Before venturing into Bitcoin, Kei spent ten years as a private banker.
In late 2015, he transitioned fully into Bitcoin, motivated partly by a defining moment with one of his clients.
“A year prior to my departure, I was in a bank meeting with a client who showed me his phone, stating, ‘At some point, I might not need your services because I have bitcoin,’” Kei recounted.
The client then transferred $15,000 worth of bitcoin to a contact in Brazil, which led Kei to initially think he was misled. However, it quickly became clear to him that the client was actually onto something significant.
“I began my research and recognized that Bitcoin was indeed a legitimate innovation,” said Kei.
Shortly thereafter, he fully committed to the Bitcoin ecosystem. After eight years of contributing to its development, he believes banks will still play a crucial role in a future that is increasingly Bitcoin-centric.
“Instead, they will act as infrastructure providers for Bitcoin companies, startups, and beyond. They will continue to serve as an essential backbone,” he elaborated.
He realized this when interest from banks and financial institutions in utilizing the Lend at Hodl Hodl product surfaced.
Setting Debifi Apart
In the months following the launch of Lend at Hodl Hodl, institutional inquiries flooded in, with organizations eager to leverage the platform.
“They expressed a desire to engage in bitcoin lending,” Kei recalled.
“However, we aimed to differentiate by separating microlending from institutional lending. It became clear that we needed to create something distinct, leading to the inception of Debifi,” he added.
By 2022, Kei was conceptualizing Debifi, and in the following year, they secured funding from venture capital firms like Ten31 and Timechain to develop a minimum viable product (MVP). By March 2024, Debifi officially launched.
The platform has been in beta operations, with the official version set to go live at the month’s end. Kei clarified that despite being in beta, Debifi is fully functional.
“Just because we are in beta doesn’t mean we aren’t operational — we are completely operational,” he asserted.
This brings us to the next inquiry: What exactly is Debifi’s operational framework?
Understanding How Debifi Operates
Debifi functions as both a website and a mobile app that work synergistically.
“Our unique value proposition lies in the mobile app serving as a key storage solution,” noted Kei. “The app acts as a wallet for your private keys, but you must access the website to engage in contract activities.”
Users utilize the mobile app to execute transactions, set up loan escrows, or pay off loans.
Additionally, users can opt to use COLDCARD devices (the Mk4 or the Q) as an alternative to the mobile app, with plans to support various other hardware wallets in the future.
“We aim to support wallets such as Jade from Blockstream, Ledger devices, Trezor devices, the Foundation Passport, and BitBox — reputable names that offer flexibility to our customers,” Kei explained.
The collateral for Debifi loans is held in a multisignature (multisig) wallet that utilizes a unique four-key setup, requiring three signatures to authorize transactions.
“At Debifi, we employ a distinct multi-signature configuration,” said Kei. “All loans are secured in a 3-out-of-4 multisig wallet, compared to the common 2-out-of-3 standard.”
The borrower, lender, and Debifi retain one key each, while the fourth key is safeguarded by AnchorWatch. Kei asserts that involving a reputable institution like AnchorWatch significantly enhances security.
“With two institutions holding keys, even if the keys belonging to the lender and borrower were compromised, there remains a requirement for one additional key,” Kei stated. “In contrast, a simpler 2-out-of-3 model could leave us vulnerable.”
Debifi loans are overcollateralized (forced liquidations occur if the collateral value decreases below agreed-upon levels), and the typical APR hovers just above 10%.
Kei’s team has discovered that many borrowers are willing to accept a higher APR for the benefits of noncustodial loans.
“Previously, we surveyed 300 Bitcoin enthusiasts with a straightforward question: Would you prefer custodial borrowing at an 8% interest rate or noncustodial borrowing at 11% or 12%?” he explained. “An overwhelming 91% preferred to retain control of their keys.”
Through the platform, users can borrow up to $1 million, with loan terms ranging from three to 12 months, with an upcoming extension to 24 months starting in April.
Borrowers can choose to take out loans in U.S. dollar stablecoins, U.S. dollars, euros, and Swiss francs, with plans to add British pounds, Brazilian reals, and Mexican pesos shortly.
Debifi generates revenue through origination fees derived from the collateral placed in escrow, and it maintains a dispute resolution team to address loan repayment challenges and related issues.
Future Endeavors for Debifi
As previously mentioned, Debifi recently appointed Preston Pysh as a strategic advisor to assist in networking and publicity efforts. Pysh will also offer insights on enhancing Debifi’s offerings.
The company aims to collaborate with Blockstream’s Asset Management (BAM) department, which plans to utilize Debifi as a technical partner for institutions interested in providing bitcoin-backed lending solutions.
Moreover, Kei indicated that several other significant partnerships are on the horizon, with announcements expected in the coming months.
To conclude, he extended an invitation to any interested institutions.
“Debifi facilitates a seamless entry into the bitcoin-backed lending arena for institutions,” Kei stated.
“We supply all necessary infrastructure, onboarding assistance, and dedicated support. We provide you with every tool you need,” he added.
“Essentially, we serve as a one-stop solution. Not only do we remove the need for you to develop this infrastructure from scratch, but we also connect you with potential customers, allowing for direct communication. Best of all, as a liquidity provider, you incur no costs. Zero.”
It’s tough to deny that Kei and his team are onto something remarkable here.
