Max Kei, renowned as both a pioneer in the Bitcoin P2P marketplace and a veteran banker, genuinely understands the nuances of the financial world. This rare combination of expertise led him to establish Debifi in March 2024, a noncustodial, bitcoin-backed P2P lending platform designed specifically for institutional clients. Operating out of Lugano, Switzerland, Debifi remains a private entity.
Kei’s journey into the Bitcoin realm has been nothing short of transformational. His foray into this space began back in 2017 with Hodl Hodl, a noncustodial P2P trading platform that quickly gained popularity. By 2020, Kei had already helped to introduce Lend at Hodl Hodl, marking a significant milestone as the first noncustodial P2P borrowing and lending solution within the Bitcoin ecosystem. The platform saw a surge in use across Latin America and Southeast Asia, playing a pivotal role in facilitating microloans. It also caught the eye of industry notables like Preston Pysh, now a strategic advisor for Debifi, and esteemed cypherpunk Adam Back.
One of the primary reasons Debifi has drawn users is the illustrious reputation of the team behind Lend at Hodl Hodl, many of whom have transitioned to Debifi. “We’ve survived numerous bear markets,” Kei shared with Bitcoin Magazine, underscoring both the team’s resilience and extensive experience that appeals to lenders and borrowers alike. Now, they’re taking the institutional plunge by leveraging their expertise from Lend at Hodl Hodl.
Before immersing himself in the world of Bitcoin, Kei spent a decade as a private banker. His pivot to Bitcoin was spurred in 2015, motivated by an enlightening encounter with a client who showcased the potential of Bitcoin by transferring $15,000 to a contact in Brazil. Initially skeptical, Kei soon realized the profound significance of Bitcoin. Although Kei believes that banks won’t vanish in a hyperbitcoinized world, he envisions them transforming into key infrastructure providers for Bitcoin ventures and startups.
The idea for Debifi emerged when financial institutions began showing interest in using the Lend at Hodl Hodl platform shortly after its launch. “We weren’t comfortable blending microlending with institutional lending,” Kei explained. Hence, Debifi was born. In 2022, Kei initiated the development of Debifi, securing investments from venture capital firms like Ten31 and Timechain. By March 2024, the platform was up and running, with plans to transition from beta to a fully operational state by the end of the month.
So, how does Debifi function? It’s offered as both a website and a mobile app, with the app serving a crucial role by acting as a key storage. The app essentially becomes a wallet, holding the private key necessary for contract engagements. While transactions like signing, creating an escrow, or settling a loan are processed using the app, users have the option to employ COLDCARD devices instead. Kei is keen on enhancing compatibility by including additional hardware wallets.
In terms of loan security, Debifi employs a sophisticated multisignature wallet system. With four keys involved, transactions require three signatures. In this setup, the borrower, lender, and Debifi each hold a key, with a fourth secured by AnchorWatch for increased security. The platform’s loans are overcollateralized, typically carrying an average APR of just above 10%. Research conducted by Kei’s team indicates a strong preference for noncustodial loans, even at a slightly higher APR.
Debifi is versatile, allowing users to borrow up to $1 million in various currencies, including U.S. dollar stablecoins and Swiss francs. The company is working towards expanding currency options and extends loan durations up to 24 months. Monetization is achieved through origination fees, collected from collateral put in escrow. Moreover, Debifi has a dedicated team to resolve loan-related disputes.
On the horizon, Debifi recently welcomed Preston Pysh as a strategic advisor, focusing on enhancing networking and publicity. A partnership with Blockstream’s Asset Management is also slated to leverage Debifi as a technical service provider for institutional bitcoin-backed lending endeavors. Kei hinted at several more strategic partnerships in the works, aimed at broadening Debifi’s influence.
Issuing a call to institutions, Kei emphasized Debifi’s seamless integration capabilities in the Bitcoin-backed lending sphere. “We offer the complete package—onboarding, support, and tools essential for your journey,” stated Kei. Essentially, Debifi aims to streamline the process, providing institutions with customers without charging liquidity providers. It’s a comprehensive solution by any measure. Clearly, Kei and his team are driving forward with an innovative vision that could redefine how institutions engage with bitcoin-backed financing.
