{ "episodeId": "SLP688", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "max_k": { "name": "Max K", "role": "guest", "tag": "MAX" } }, "segments": [ { "speaker": "stephan", "time": "00:10", "start": 9.77, "text": "Hi everyone, and welcome back to Stephan Livera podcast brought to you by Bold. American listeners, you can buy Bitcoin over at Bold Bitcoin for the best or lowest rates, and you can also get Sats back using the Bold debit card. Rejoining me on the show today is Max K. Max is the CEO and founder of Debuffy, and he's also involved with Baltic Honey Badger. Good job. Max, welcome back to the show. Thank you for" }, { "speaker": "max_k", "time": "00:33", "start": 33.0, "text": "having me. Pleasure to be back, Stefan. And, I was happy actually to see you two weeks ago at the Baltic Mining Bedrock. So, it was a pleasure. Yeah, I" }, { "speaker": "stephan", "time": "00:41", "start": 40.81, "text": "mean, we should chat about that. I mean, I thought it was a great experience, great chance to understand what's going on, at least from my perspective. I like to sort of keep my ear to the ground to sort of understand what's going on with different projects. so there was a lot going on there. What Baltic Honey Badger this year, twenty twenty-five." }, { "speaker": "max_k", "time": "01:02", "start": 62.18, "text": "Well, I think that even, w- you know, all the conferences before Baltic Honey Badger this year, most of them were talking about, you know, institutional adot- adoption and Bitcoin treasury companies, and, we just, you know, we're at some point we just figured out that maybe people are kind of tired of this topic, you know, everyone is talking about Bitcoin treasury companies, et cetera, et cetera. Nothing bad, bad about that, I mean, I fully support the but, I mean, we were thinking maybe people are a bit tired, we, you know, we need to change, change the, the topics and the agenda a bit. We had some content about Bitcoin treasury companies, but we ended up actually talking on, on panels that wasn't even about, treasury companies, still people were bringing that topic up. And, you know, even Baltic Honeybedger, which is like OG, very cyberfunkish type of conference, even we can- And not, we weren't able to ignore that, that thing about, you know, public companies adopting Bitcoin, even a-and also non-public companies adopting Bitcoin as a treasury asset. I would say that was, not a highlight, but definitely a topic that, we weren't expecting that it was, it will be so popular, even, among people that you think that they're far from any type of institutional thing. but for me the biggest, one of the biggest revelation was, ARC, which is a new thing by, by, by ARC, obviously by ARC team. There are several teams that having this, working on this implementation because You know, Honey Badger was, always, sandbox for a lot of different initiatives. Like we were the first conference that, adopted the, the option to pay with this amazing, cards, you know, just top, I don't know, what are the cards? Yeah, yeah, cards. So we were the first conference that actually tested out everything properly, and now like almost every big conference has this, Think, you know, you can just top up with the card and, and make a payment. That was, that was really neat back, I think it was twenty twenty or twenty twenty-three, and, this year we were the first who actually, did, all our merchants were accepting, lightning payments through ARC. And it was so seamless, so even I- People didn't even notice, right? Yeah. Even I didn't realize this until the last day when in evening I went to buy some- Food for myself, and then I realized, oh, okay, that's, that's actually ARC, you know, it's, it's working there. And, I guess there will be a use case because the guys put a lot of efforts in them. I just want to say a huge shout out to everyone who was involved, especially Cooks, who is like, force behind, this stuff. So, but yeah, that was the revelation for me. It's, it's very exciting and nothing crashed, it was working seamless Honestly, so for me, from the perspective of the conference, ARC was the big revelation, honestly. It's so promising, and I'm very excited about that because it just opens a lot of different ways how you can finally properly, as a builder, as a, as a developer, you know, work with the Lightning and, you know, they're building a very amazing tool, and hopefully everything that they declare will, will come true. I'm like, fingers crossed." }, { "speaker": "stephan", "time": "04:43", "start": 283.43, "text": "Yeah, this is really cool. Tierru and Cooks and the guys over at Ark Labs, they're doing something really interesting. So I'll just quickly explain just for listeners, make sure everyone's following along. So you might be familiar with like buying, you know, you might have seen some videos of like, whatever, an influencer going and buying something online and paying with their Lightning wallet. And this is similar to that, but actually in the background, they were using Ark. And so what, because Cooks came also from the world of BTC Pay Server, which is also As I understand they had set up is they had these merchants with BTC Pay, but it was Ark in the background. And so when you went to pay, you either had the option of Lightning or just directly paying with Ark. And so you could scan a QR and on the front to the end user, to you and I buying our coffees and our food, you could pay with Lightning. But the cool thing is, actually in the background, I believe it was Boltz dot Exchange who were doing like a swap in the background. And so what's happening is that merchant is-- so it's, the end user is paying in Lightning, it's being swapped into ARC, a VTXO, a virtual transaction output, and then later, that merchant, you know, just get-- and, you know, that merchant can just have a very simple, you know, Arcade wallet, send, send Sats, receive Sats experience, and when they wanna batch out, they can sort of batch out Out all of their VTXOs into Bitcoin main chain UTXOs. So that was really interesting, and as you said, this is like we're starting to see, let's say, quote unquote, real Production L2 is other than Lightning, right? Because for so long it's just been kind of a Lightning is the only truly, you know, production ready L2 that's, you know, actually, yeah. I" }, { "speaker": "max_k", "time": "06:23", "start": 383.39, "text": "mean, I wouldn't say so. There's also Liquid, which, which you can argue whether it's L2 or it's a side chain or whatever, but I mean, Liquid's been there for years and, it's really amazing because we've been working with Liquid. I mean, most- On, on the level of that, for example, in Debitify you can borrow using Liquid, Liquid Dezer and it just works really nice and people are like, people are really enjoying it but overall, yeah, ARC, my, my case with ARC is that, at least it looks promising from the perspective of building different tools on top of, of ARC, and then these tools will be compatible with Lightning. That, that was a huge problem Because Lightning is perfect for payments, I, I totally agree that, with that, I mean, whatever you wanna buy on the conference, outside of the conference, Lightning is just perfect for that. But in terms of building different type of financial tools on top of that, whether we're talking about, about trading, lending, I don't know, whatever. Lightning wasn't perfect, and, you couldn't build a lot of interesting stuff on top of that. Finally, I hope ARC will bring to the table that Lightning will become, a proper, you know, tool to build some cool stuff on top of that." }, { "speaker": "stephan", "time": "07:54", "start": 474.27, "text": "Yeah. So yeah, I mean, yeah, I, I, I see it like this, just we're seeing this further exploration and maturation of other L2s, let's say, and I guess depending on whether the account lo-liquid or not, Yeah, you would say, yeah, but there's a bunch of these now. So you got Lightning, there's Liquid, there's Ark, there's people doing like eCash things with Cashu or Fedimint, there's Spark as well. so there's all these different things, and of course, there are people even over in, zk Rollup land, people are trying to do things on that, on that side as well. so, yeah, so we've spoken a bit about Baltic Honey Badger. Let's, give just a quick overview" }, { "speaker": "stephan", "time": "08:40", "start": 520.25, "text": "Big collateralized lending against your Bitcoin, and you can get stablecoins or fiat in the bank account, borrowing against your coins. So can you just give a quick overview what is the model with Debuffi?" }, { "speaker": "max_k", "time": "08:53", "start": 533.12, "text": "Yeah, so basically, we adopted the already existing model from retail space, peer to peer, and basically the idea of DeFi is that we want to bridge, institutional liquidity providers also from trade finance like banks and, and hedge funds and other like regulated or non-regulated entities, but those who aren't regulated, they aren't allowed to issue loans. And we want to bridge, bridge these liquidity providers with Bitcoiners across the globe. So we onboard from one side, different type of institutional lenders. It's only institutional lenders that operate on DeFi, and on the other side, we bring, borrowers, both private individuals and corporates. So it's like I like to explain it in simple terms, it's like eBay for Bitcoin loans. You know, it's, Debitify is just a te- technical infrastructure provider, so we're just building this marketplace. It's effectively a marketplace of liquidity for Bitcoin-backed lending. And, every time borrower and lender engage in a contract, they create together, multisig on the public Bitcoin blockchain. So it's like fully transparent, we don't have any wallets, we don't store any funds. they create it with their own keys. W- currently we have a model by default which is three out of four, so it's like four keys to the multisig, one key goes to debi.fi, one goes to lender, one key goes to borrower, and one key, goes to independent authorized keyholder, which is an independent entity that holds a backup key. And you can only move collateral from, from, from the escrow by having majority of the keys, which is three, three keys at least. So, then you have a multisig, then borrower deposits, collateral in form of Bitcoin, only Bitcoin, we work only with Bitcoin, to that multisig, and then lender sends, either stablecoins if it's a stablecoin based offer, or, it could be also fiat if it's, if it's a fiat based offer. And we provide lenders with, all the necessary infrastructure, including, like loan portfolio management. You can set up your terms, KYC, KYB will, will, will, will like connect you to our KYC, KYB model so you can gather all the necessary information. So it's basically, yeah, it's in-- it's institutional grade, platform that allows, any liquidity provider who doesn't have any technical expertise in building complicated, and highly secure environments with Bitcoin, to start operating on the Bitcoin-backed, market." }, { "speaker": "stephan", "time": "11:42", "start": 702.03, "text": "Excellent. And so, yeah, so I guess in simple terms, this is the Bitcoin collateralized lending market for, let's say, larger dollar amounts. So what are the thresholds that you're working with," }, { "speaker": "max_k", "time": "11:57", "start": 717.14, "text": "here? We have, yeah, we have actually the minimum size, is twenty-five thousand for a loan. Okay, gotcha. But we have some lenders who asked us like, can, can we go a bit lower? So you can, you can borrow also lower amounts. And we're also going to launch pretty soon an infrastructure that will allow you to take micro loans from different lenders in the form of, payment card. Gotcha. Okay, so then it doesn't" }, { "speaker": "stephan", "time": "12:27", "start": 747.23, "text": "necessarily have to be large loans. Okay, fair enough. Yeah, it's, it could be, it" }, { "speaker": "max_k", "time": "12:31", "start": 751.13, "text": "could be, it could be just like five hundred dollars. Up to one thousand. For now, it's gonna be like micro lending site will be from five hundred to up to one thousand. We're partnering with the Bitcoin company, so you will get your loan in form of prepaid card directly to your mobile phone, and all the user experience and all the like, path from onboarding and getting the loan will be through mobile phone, so you can do it on, on, on the go, because DebitFly also has an app, so it's an app plus website." }, { "speaker": "stephan", "time": "13:03", "start": 783.47, "text": "Yeah, okay. And so, then in terms of the loan, term, can you explain a bit about that? Like, is it like a one year loan term or how, how does that work? What's the, what's the threshold there?" }, { "speaker": "max_k", "time": "13:19", "start": 799.03, "text": "At the moment, you're getting some very, very interesting information for me with your questions because, you know, we didn't announce it yet, but I guess I'm gonna use your podcast to announce. So," }, { "speaker": "stephan", "time": "13:29", "start": 808.52, "text": "alright. That's" }, { "speaker": "max_k", "time": "13:30", "start": 809.6, "text": "good. At the" }, { "speaker": "stephan", "time": "13:30", "start": 809.98, "text": "moment," }, { "speaker": "max_k", "time": "13:31", "start": 810.84, "text": "yeah, at the moment, I already did mention the cards, so we're launching the public beta, basically next week. And, my, as for the duration of the loans, currently it's up to twelve months, but in September it's gonna be twenty-four months. But you need to understand that we have different lenders and it's up to lender. It's an open market. I mean, it's, it's-- You need to" }, { "speaker": "stephan", "time": "13:57", "start": 836.6, "text": "find a counterparty. You have to find someone who's willing to do the opposite. Yes." }, { "speaker": "max_k", "time": "14:00", "start": 839.56, "text": "If, if most of the lender will say no, I'm fine with like shorter terms, then we can't do about any, anything about that. We just have a functionality and a feature that will allow you to issue loans up to twenty-four months. if there will be lenders who will like to use that feature, fine. If I mean, we can't, again, we, we don't touch the cash flow, we just provide technical infrastructure. As long as they're like liquidity providers who are happy with twenty-four month, loan, loan duration, fine, let it be." }, { "speaker": "stephan", "time": "14:34", "start": 874.02, "text": "Yeah. Okay, great. And so, I am curious, and I'm sure listeners will wanna know, what are-- now, as you said, it's a market, but what's like roughly the ranges that we're working with here for borrowing against Bitcoin? Like, how much are people paying on the borrower side to borrow against a Bitcoin?" }, { "speaker": "max_k", "time": "14:55", "start": 895.01, "text": "Yeah. So, so the average interest rate on the market across the most of the platforms, like the consensus interest rate, I would say, is like twelve percent at the moment. and, I mean, there's like some platforms that use this like level system, you know, you borrow more, you pay a bit less, but it's like Some of them just like, you know, crazy figures, you know, you borrow from five million, from ten million, then you're gonna get like cheaper interest rate. but most of the borrowing is happening in the range between, I would say, ten thousand up to two hundred, three hundred thousand. When I say most, I'm, I'm meaning on the market, you know, it's not on particular on DeFi. And in that rate, mo-most of the loan sizes are, most of the interest rates are, around twelve percent. So twelve percent is the average interest rate at the moment on the market. you can go, by the way, we briefly talked with you about Zone, Zone twenty-one website, I'm sure we're gonna touch base on that, but you can go on that website or follow them on Twitter, and you can see that they're like updating the interest rate across the board of different lending pro-protocols and, and platforms, and it's actually true, I'm not making these numbers up. the good thing is that the- If I onboard more and more lenders and we onboard more and more lenders from trade finance space, who are closer to like cheap capital and closer to like cheap capital markets, and we already see that there has been some private loans issued with single digit, Single digit interest rate. Like the best interest rate that we saw in our marketplace was nine percent. It was in, in Swiss francs. which is like, yeah, still it's different currency than most of the loan because the, the main currency for the lending business is USD, yet still. And, but it was single digit loan and, it was a good amount of money, it wasn't like super high It, it wasn't like millions, we were talking about thousands, ten, tens of thousands. So I mean, we are moving in that direction. I guess next year, if market gonna develop as, as it has been developing, we, we're gonna touch ba- touch on like single digit loan, size or like low double digit, like ten percent, something like that, because a year ago it was actually sixteen percent. And you still can, if you will go to peer-to-peer marketplaces, you still can see that some of the interest- Interest rate are above forty percent, it's like fifteen, sixteen percent, so I mean, as cost of capital will go lower, as more and more liquidity will go into the market, we'll see that rates, rates are dropping, but it's not gonna like- A lot of, people who aren't familiar with the space and a lot of bitcoiners, no offense, but they say like, you know, it's a, it's a pristine super collateral, you should, you should give me a loan with almost zero interest rate, and I mean It's strange because" }, { "speaker": "stephan", "time": "18:07", "start": 1086.65, "text": "the lead sponsor of this show is Bold, the banking platform designed for Bitcoiners. With the Bold Virtual Visa Debit Card, you earn Bitcoin back on every purchase. The more Bitcoin you buy with Bold, the more Sats back you get on the card. Buy $2,500 of Bitcoin and earn 3% Sats back. 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The Coldcard Q has a full keyboard and big screen, it's got two secure elements and a true air gap, allowing you to go fully air-gapped using QR codes from seed generation to transaction signing. You can power the device using three triple-A batteries, so you don't even have to plug" }, { "speaker": "stephan", "time": "19:30", "start": 1170.08, "text": "For PC or Nunchok on mobile, and you can dial it into the right level of security and complexity that you choose. If you want a simple setup, just use twelve words and single signature. If you want passphrase, it's easy. If you want to add multi-sig or co-signing features, you've got those too. So go to coinkite dot com, use code livera to get ten percent off on your cold card or other devices and level up your self-custody today." }, { "speaker": "max_k", "time": "19:52", "start": 1192.25, "text": "Most of the lenders in, in a Bitcoin lending market, they're actually Bitcoiners and they understand the value proposition of Bitcoin. So for them, it's always, you know, should I just buy Bitcoin or should I issue a loan in fiat? And, I mean, it's always tricky, and they also know that you are a Bitcoiner, you don't wanna sell your Bitcoin, and most probably you're gonna overpay for opportunity not to sell it. So it's, it's a, you know, it's a double-edged sword in a way that, you know, there's not only borrowers who decide, it's an open market, and this is what we're proving with DeFi, you go on DeFi and you see like What market perception is ac-across the board of different lenders, what kind of rates you should, you should get at this point? I mean, it's going lower definitely, but it's not gonna happen that it's gonna be cheaper than mortgage rate at some point. I think it's gonna be like If in next five years we're gonna see like six percent, five percent, Bitcoin-backed lending rates, then I would say we, we, we're highly successful with that." }, { "speaker": "stephan", "time": "21:00", "start": 1259.64, "text": "I think one under-discus- one under-discussed component of that is that effectively a lot of what people are used to today with fiat credit is it's government subsidized, right? Like that's just the bottom line. It's government subsidized. And so if you're having to interact with a person who would otherwise be able to buy Bitcoin with that money, it's gonna be a tough sell for them to give because think about what they're giving up on the, if you are on the lender side of, of the house here. And you are already somewhat Bitcoin savvy, you have to think, how much am I gonna charge this guy, the borrower, for him to use my fiat that I have hypothetically? And for me to not buy Bitcoin with that. And also, you know, our, our friend Matthew Mecinski, who spoke at the, at Baltic Honey Badger, he does these, you know, these base money reports, and oftentimes if you look at how much base money is expanding, it's like ten or twelve percent per year Right? That's how much fiat is expanding. So it's kind of like, actually when you think about it, if, if, if fiat is expanding at twelve percent per year and someone is lending you at twelve percent a year, it's almost like You know," }, { "speaker": "max_k", "time": "22:07", "start": 1326.76, "text": "yeah," }, { "speaker": "stephan", "time": "22:07", "start": 1327.08, "text": "net, net." }, { "speaker": "max_k", "time": "22:09", "start": 1328.72, "text": "I, I mean, Bitcoin backed lending is definitely a part of portfolio strategy for most of the liquidity providers. They still have Bitcoin, but they, they prefer also because effectively what Bitcoin backed lending is, especially over collateralized Bitcoin backed lending, it could be considered as basically Bitcoin bond. You know, it's something that is backed by this hard asset which is Bitcoin. It's over collateralized, meaning that even if you're borrowed- Will, will fail to repay, you will get his collateral in, in any way, and, it just pays you a coupon every, every year. Like, imagine you're taking a loan for, you're a lender, you're providing a loan for, let's say, two years with ten percent interest rate, so your coupon effectively, is ten percent per year plus your over collateralized. It's actually even better than the bond, because bond is the, like government bond is like you're trusting that, that this particular government of this country, or if it's a like corporate bond, that this particular management team will be able to return you on your investment and not fail, which couldn't be true at some point. We see what happened with Argentina. China, with Greece, a lot of these countries. And Bitcoin backed lending, the good thing about it is for the lender, it's also a win-win because it's always backed and over collateralized by Bitcoin. And Bitcoin is like super, the best asset in the world you can have. And there's multiple reasons, but one of the most important reason that it's twenty-four seven tradable, meaning that if your borrower get liquidated, you can sell the collateral and cash out right into the money. Depends on what you call the money, of course, but you can cash out right into the money any time of the year, any, any hour of the day basically, because markets are so liquid and they're getting more and more efficient. So it's, it's like, it's a perfect collateral and a perfect opportunity to earn extra, because I see those like conventional lenders who are trying to lend out money get bit more margin, and they're lending out money against like operational businesses or even- Even non collateralized loan with thirty percent, risk premium, and a lot of them are actually failing because that's the, that's the general failure of the system, you know, printed money. And with Bitcoin, there's such an amazing opportunity, you can get double digit returns Super overcollateralized with the perfect asset in the world, and a lot of trade fi guys are sleeping on that, but I think it's like it's, the, the, the narrative is shifting, especially with BlackRock and with, ETF and with all these treasury companies coming to the market. I mean, there's more and more demand for Bitcoin-backed lending, and they're like waking up to that opportunity." }, { "speaker": "stephan", "time": "25:00", "start": 1499.86, "text": "Right. And I think, I think you're right, because ultimately there are so many fiat investors who are just getting wrecked in bonds today, right? And so sometimes I get a bit, it's like I see a lot of hand-wringing inside of the Bitcoin, let's say, in our little echo chamber of Bitcoin Maxis, where people are kind of hand-wringing about, \"Oh my gosh, this treasury company, this or this whatever thing, why don't people just go and buy Bitcoin?\" But you've got to understand, like, there's a lot of-- there's just a lot of capital that is extremely conservative, not willing to just go buy Bitcoin. They're just not willing to Right? If they can come on, let's say, now we're speaking on the lender side of the house here, if they as a fiat, you know, denominated person could just come to these platforms and put some fiat on this and be earning, like you said, twelve percent or maybe a little bit higher, twelve to fifteen percent That's absolutely killing what they're earning currently. Yeah. So I think that there's just a big disconnect there." }, { "speaker": "max_k", "time": "26:00", "start": 1560.48, "text": "Yeah, I mean, with treasury companies, a lot of people doesn't understand that it's a good way to get Bitcoin exposure for a lot of trade fi companies and a lot of funds and a lot of You know, pension funds, because in, in their like rules, it's written, you know, some, in some of them, like you can't be exposed directly to Bitcoin or to like volatile assets, you know, you need to be very conservative for them, like buying some MicroStrategy or Strategy shares or other MetaPlanet shares or BlackRock ETF is a way to, how to get exposure to the Bitcoin because they're like bored or those who made Those rules are very like old school thinking and they don't believe in Bitcoin, so it's like, it's a good way to kind of orange peel to some extent Largest capital providers in the world, like, you know, there, there was a news, I think two days ago that, largest, pension fund, la-largest state fund in the world, which is a Norwegian, state fund, they just increased their, their, you know, exposure to, I think it was MetaPlatinum Strategy, both of them, or BlackRock ETF, I missed on that, but they almost doubled the, the amount that they invested. So, I mean, that That's, I'm happy for that because obviously that means like adoption is growing, you know?" }, { "speaker": "stephan", "time": "27:27", "start": 1646.98, "text": "Yeah, and I think that's, I think that's, exactly it, like we need to zoom out a bit because honestly there are so, some people who are so caught up in like the echo chamber or they're sort of, they, I think it's like the theory of mind thing, right? Like if you don't model other people's mind correctly, you might just think, \"Oh, hey, everyone should just buy Bitcoin and it's just so obvious.\" Well, yes, And, you know, we're, we're Maxies, we want as many people to adopt Bitcoin as possible, and I see this as like, this is like, you're structuring things in a way that you're helping some of these-- and that's why I'm, you know, generally speaking, I'm bullish on the treasury companies, and I'm bullish on, you know, Bitcoin lending, and I'm bullish on just Bitcoin for medium of exchange, right? I'm, I'm just bullish on all of these things. I want more people to use Bitcoin in whatever way is possible. Now On ramp for these things, and people don't all come in in the perfect, let's say, purity signaling or purity spiraling way. So that's where I see it, and I think if you, maybe if you could explain a little bit on the lender side, what are some of the hurdles or mental blocks that you sort of see, or if you're presenting the platform, Debuffi, to them, what are the main objections that they are throwing to you and saying, \"Oh, I'm not sure about it, or I don't, I'm not ready for this yet, or maybe" }, { "speaker": "max_k", "time": "28:51", "start": 1731.25, "text": "Yeah. So, so I mean, i-it's not about the core value proposition, you know, Bitcoin-backed lending, it's more about, for most, for some of them, it's more about, self-custody or collaborative custody. This is, this is our path, you know, it's, it's harder than building a custodial solution, definitely. So what we say to them is that You're gonna hold one of your, one of the keys. You're gonna, you're gonna self-custody one of your keys. Yes, we're building infrastructure for that so you can do it very easy. We're gonna announce some big integrations, also very soon, that will allow basically any institution in the world to hold the key, to the DeFi asset growth through solutions that they prefer in their day-to-day operations, but it's still a hurdle in a way as self-custody for most of the people, is still a hurdle, you know? It-- and it's a, it's a path, and we, we knew when we started, we knew that it's gonna be hard on the educational s-side, but it's actually- Surprisingly, it's easier than we expected. So for now, a lot of, new entrants who want to enter into Bitcoin lending space, they wanna do like, okay, I wanna custody all the, all the collateral in my, you know, in my custody or in my, third party custodian that is like, you know, there's big names outside, out there, I'm not gonna name them, but, and for them, the concept of the multisig Is, is bit new. So that would, I would probably d-d- say that that's the most, you know, challenging part of, of our, offering. We're making it way more simpler than it was, and like, again, by the end of the year, it will be very simple to, you know, hold your key to the, to the collateral, but that's also, we can't compromise on that because on the other side, we have borrowers who are Bitcoiners, and they value multisig approach approach because of what happened with BlockFi, Celsius, FTX, you know, they, they don't like the custody. And the case with DeFi is that, you know, it's like gradually then suddenly, we have on the pipeline a lot of interesting liquidity providers, very traditional, who gonna be onboarded, in next like three to six months And it's gonna be like kind of, I expect it's gonna be a small revolution in like trade-fi world because of the partnership that we're gonna, we're gonna announce. And, the case is that, you know, it's gonna be just easier and easier for them to self-custody, and that's the service we want to provide, and that's the service we want to provide to borrowers, to bitcoiners, because we want to onboard this institution to the proper way of doing the Bitcoin lending and the proper way from our- Our perspective is a multisig because if you will look at the history of Bitcoin back lending, you know, the project that easily survived the wave of bankruptcies that was happening in twenty twenty or twenty twenty-two, I don't, I don't remember the-- When the block five sell-- twenty twenty-two," }, { "speaker": "stephan", "time": "32:07", "start": 1927.49, "text": "yeah. So like that FTX bottom was kind of late twenty" }, { "speaker": "max_k", "time": "32:11", "start": 1930.61, "text": "twenty-two, yeah. Yeah. These were the projects that were using multisig, it was like basically unchanged and huddle-huddle, you know, no issues at all. and this is what we are like, we're preaching and we're trying to move to the market, and I expect that as soon as we're gonna complete some of the features that we're building at the moment, and as soon as we're gonna onboard some of the liquidity providers that have even cheaper cost of capital than those who have, who operate the custodial lending platform It will be no-brainer for most of the bitcoiners and most of the trade-fight companies how to operate on the market, because effectively, if you can get the same rate but the security is like ten times better What's the purpose of using Custodial lending platform? Maybe for some micro lending and micro loans, there is a purpose because it's, it could be faster and like seamless, or maybe as a first loan, just as the first buy you do through Coinbase or Binance or Kraken, a lot of people just onboard through these custodial services. But then when you, when you will have to borrow, a significant amount and you'll have to lock a significant amount of- Your Bitcoin into collateral, you're gonna think twice whether I wanna trust with my Bitcoin to the third party custody provider or I want to make it a collaborative custody and hold one of the keys to the escrow." }, { "speaker": "stephan", "time": "33:38", "start": 2018.37, "text": "Yeah, so I mean, I think you, yeah, I think it's, that's really, that really is the trade-off that we're going to see this competition between the, quote-unquote, trad-fi style, maybe arguably the \"trust me, bro\" style of lending versus the more DeFi on-chain multisig style, and okay, maybe there's, there's other styles, but let's say the more The closer to self custody, even though it's kind of hybrid." }, { "speaker": "max_k", "time": "34:04", "start": 2043.69, "text": "I, I don't like the DeFi, you know, DeFi thing. Right. The word is a bit, triggering," }, { "speaker": "stephan", "time": "34:09", "start": 2049.23, "text": "let's say." }, { "speaker": "max_k", "time": "34:10", "start": 2050.13, "text": "Yeah, it, it, it just, you know, triggers me as a, as a Maxi, but, yeah, kind of more, I would say custodial versus non-custodial, that's the proper way to frame it. And I think that- If you go for-- if you look at the trading business, definitely custodial trading will be, most probably for the next five to ten years, will be the bigger, part of the, of the trading volumes in, in a Bitcoin space, because, you know, traders, they just need like-- they need the fast execution frequency, you know, they, they, they cannot afford themselves loose seconds when something is happening. But with the lending, you usually borrow for a longer time period Period. Right. And doesn't matter as much. Doesn't matter as much. What matters in lending is how safe is your collateral. A lot of people, they neglect that. They think that, hey, there's like a shiny- Nice thing or their whole, you know, they're like, you know, they have a proof of reserve, which is a good way and a step forward, you know, the new thing, proof of reserve, but actually what proof of reserve Proofs is that your Bitcoin, you send Bitcoin to a particular address and it's there in that address. It doesn't prove how keys to this address been management, managed, who owns the keys to this address, et cetera, et cetera. It's, it's actually still, trust me, bro, as you said, you know, and yeah, a lot of entities are regulated, highly li-licensed, everything like that, and I think that Both custodial lending and non-custodial lending will have a place and space in the market because the market is just big and it's gonna be bigger. But I think if we're gonna talk about large volume loans, and we see that from our perspective and like companies, Bitcoin companies borrowing I would say it's probably gonna shift the narrative significantly towards the non-custodial lending, because if, if, if Bitcoin, company is coming to us, whether it's a mining company or it's, you know, hardware company or something like that One of the reasons why they're coming to us, they're saying, \"We wanna use multisig, we're either borrowing through multisig or we're not borrowing at all, and we don't care what kind of license, brand, and, custody provider or, custody solution you have, as long as it's not transparent as it is with Debitify, you know, open-sourced, fully transparent, you can always verify through any blockchain explorer we're not using it. Gotcha." }, { "speaker": "stephan", "time": "36:45", "start": 2204.57, "text": "So there'll be those users who- Who are more security conscious, and they'll be more interested in this kind of thing. Now, I guess just to kind of throw an example at you, and I'm curious to hear how you, how you think about this, because if we think about today, where is a lot of the wealth, right? It's typically TradFi boomers, right? They've got their, whatever, their stock broking app, and that's where probably the boomers are holding a lot of their wealth today. And they might like, for example, all the integrations together, right? Like, 'cause they or email, and they want it all in one, you know, because they wanna borrow against it and then, let's say, have like, you know, a physical card that they can use to kind of borrow some, you know, and then use to spend, right, to off-ramp. or they might wanna be able to quickly trade around, to different whatever, to borrow against, as an example, maybe they wanna borrow against some Bitcoin, get some fiat, and then buy- Strategy or Metaplanet, right? As an example. Yeah. So maybe it's, maybe that's also a competitive dynamic of like there'll be kind of the one-stop shop, go to this service, and we can kind of give you everything, but the trade-off is, it's a little more trust me, bro on the custody side of things compared to The more secure, let's say, model, where you can hold one of the keys, and so how would you compare, you know, the-- those different visions of products and services?" }, { "speaker": "max_k", "time": "38:06", "start": 2286.49, "text": "Yeah, but it's like you can build everything that you just explained with the multisig, and it could be as seamless as, as what you just explained. I mean, we're moving in that direction with Debitify as well. I mean, it's gonna be about lending, but we can add different features as well, you know? You can, you borrow against your stack, then, maybe you wanna just instantly buy more Bitcoin and hold it in, like multisig custody, you know? You can build everything with multisig. It's just harder, you know? A lot of founders, they're choosing the easier way. Which I can't blame them, honestly. Maybe I'm just, you know, stop born and crazy in a way. If I would, do it like Casca's Torial, way, it would be way more easier. Oh, much simpler" }, { "speaker": "stephan", "time": "38:55", "start": 2334.79, "text": "from your perspective, but of course, yeah. But I mean, of course, maybe less secure, maybe less verifiable, and kind of less, let's say, quote-unquote, cypherpunk Bitcoiner ethos, let's say, i-is to kind of make it more At least closer to the non-custodial side of things, even if it's not a hundred percent, right? Because obviously you're holding one, not four keys, but that's fair enough because the lender wants some assurance on his side that, like, the borrower's not just gonna like run away with the money, obviously. So it's kind of-- I would say it's closer to non-custodial, though not fully non-custodial, for which, for fair enough rea-- for fair reasons, is how I understand it. But yeah, like you said, we are going Trust me, bro, model of like, hey, just custodial everything in one app and whatever, and then there'll be sort of the more, multi-sig style vision and maybe in a liquid world, like, okay, the idea is we're using Bitcoin as the main chain and Liquid is a side chain, a federated side chain, and inside of Liquid, people can do things there too, right? They can like- Yeah. As an example, they could get Liquid Tether and then instantly buy Liquid Bitcoin with that, or they could instantly flip to, even if they wanna do all the treasury company stuff, like what Adam Back is doing, instantly buy, you know, C-MSTR or like these tokenized forms of strategy or Metaplanet or what, these different, treasury companies. So These things will exist, but just in different formats, and people just have to learn how to, let's say, traverse these different worlds, right?" }, { "speaker": "max_k", "time": "40:27", "start": 2427.14, "text": "I think the, the case is that, with non-custodial service also that not many, People and participants in the market understand that as price of Bitcoin will grow, there will be two, two main reasons why people wants to borrow through non-custodial services. Number one is that generally you don't wanna sell when you see that your Bitcoin that you hold for like five years is growing I don't know," }, { "speaker": "stephan", "time": "40:58", "start": 2457.83, "text": "three, eight, nine x or something or whatever, yeah?" }, { "speaker": "max_k", "time": "41:01", "start": 2460.57, "text": "Yeah. You don't wanna sell, so what, what do you do? How you derive utility from, from your stash and from your stack? How you do that? You're gonna go and borrow against that, obviously. And, the second thing, as price will grow, you will be more risk aware and you will be more paranoid in a way, should I actually send my Bitcoin to this custody or to this exchange or to this service provider, or I can make another path, you know, I can just send it to the multisig? Which I can verify, and I can hold my keys on a cold card, which we, with DeFi I support at the moment, and there will be more hardware wallets integrated, and I can create this multiple security layers, and it's like, it's a collaborative custody, meaning there's like institutional cl-uh, like custody players involved, and the, the second player is also institution, which is a lender. So you will be more like risk cautious. So as the price will grow, I envision that There will be more demand for Bitcoin-backed lending, and there will be way more demand for non-custodial Bitcoin-backed lending. Of course, it always goes with UI and UX and the experience, as you said, you know, I wanna have everything in one place. But it's actually it's, it's possible to build trading, custody, lending in one app through multisig. It's a no-brainer, it just takes a bit more time and a bit more effort, but eventually, you know, that type of project I envision they're like built for. Years and centuries up front, because they're like, it's harder to scale this stuff, but when you scale it, you know, it just goes and grows by itself. It's like self-fulfilling, you know, stuff that just goes, goes, goes, goes, goes." }, { "speaker": "stephan", "time": "42:52", "start": 2571.66, "text": "Yeah, gotcha. And so, yeah, I think we've spoken about, you know, the reasons why people do these things. So on the lender side, right? Obviously, if they've got some fiat allocation Either they're a no coiner or they're a Bitcoiner who has some fiat allocation and they, they would like to earn some yield out of that by being a le- on the lending side of the house. now let's talk about the borrower side, borrower side of the house. Now you touched on this Probably for many people, it's they've built up a Bitcoin stack over some time, they would rather either not pay capital gains taxes and/or maintain exposure to Bitcoin, so they would rather borrow against it, as long as they can get a decent, you know, rate and a decent terms, this kind of thing, and then maybe there are some other people who wanna, maybe they have other commercial projects that they would like to do, so they wanna borrow against some Bitcoin, get some fiat, use that fiat for those commercial projects, and maybe for some of those people, that's People that they wanna invest in Bitcoin treasury companies, for other people it's, you know, to some other, you know, fiat totally unrelated, unrelated to Bitcoin business. what are you seeing? or some people, they wanna go long Bitcoin, right? They wanna borrow against their Bitcoin, get some fiat, and then buy Bitcoin, because obviously they love Bitcoin, they wanna, you know, go long Bitcoin. what are the uses that you are seeing? Is it mainly those other uses that you would see on the borrowing side of the house?" }, { "speaker": "max_k", "time": "44:17", "start": 2656.55, "text": "I mean, the use cases and the users on the borrowing side are, well, for private individuals mostly to, you know, buy more Bitcoin," }, { "speaker": "stephan", "time": "44:26", "start": 2666.22, "text": "which is not surprising." }, { "speaker": "max_k", "time": "44:28", "start": 2667.62, "text": "Yeah. So effectively you're just leveraging through multisig, you know, it's a safe way to do the leverage. Again, there's no, there's, there's no custody risk or significantly decreased custody risk So that's number one, number two, and again, I'm, I'm putting number one, number two, not in terms of priority, just use cases, you know, it's not like the buying more Bitcoin is the most obvious and popular case, but it's like very popular. then, you know, some expenses, just life expenses, you know, I don't wanna-- I'm relocating, I'm buying a house, I don't know, I wanna buy some stuff. And I don't wanna sell, you know, I have, in, in twelve months I expect that either the price of Bitcoin will grow and I can just cover, you know, part of my loan with the Bitcoin price difference, or, I don't know, I expect that I'm gonna have different resources of my cash flow and I will be able to pay back my loan. Another important feature to consider is that actually when you sell Bitcoin in most of the countries, it's, It's subject to capital gain tax. So w-when you borrow, in most of the countries, you aren't paying the capital gain tax, so that's effectively avoiding the capital gain tax in, in a lot of countries. So I guess" }, { "speaker": "stephan", "time": "45:46", "start": 2746.35, "text": "you can think of it like, instead of paying Twenty, thirty, forty percent capital gains tax, I'd rather pay twelve percent interest, kind of, yeah, I'll pay twelve" }, { "speaker": "max_k", "time": "45:54", "start": 2754.48, "text": "percent, yeah, I'll pay twelve percent interest, you know, and I'm gonna keep my Bitcoin. That's probably worth of hundred percent, more. But, for the corporates, it's usually very simple. there's two use cases again. We've been approached by some treasury companies and, some companies also that have private treasury. And obviously they also don't wanna sell, but they wanna cover their operational costs, that's number one reason. So it's like operational costs, I don't wanna sell my Bitcoin, you know, we have like certain amount of Bitcoin on the balance sheet, and we, we just wanna borrow against that. Then there's like business expa- expansion, you know, we're launching the new product line or we are going into the new market, we wanna, we wanna borrow against my, against our Bitcoin and again expand. And with treasuries companies, Some of the treasury companies, they don't have opportunity to borrow that easily on the public markets, you know, either they're new or they, they don't have, these capabilities yet. And then what they do, they don't wanna sell Bitcoin because that's, that's basically the, the promise that they're delivering to the market, you know, we're not selling, we're, we're keeping Bitcoin on the balance sheet. How they can buy more? Obviously they can borrow against their Bitcoin and, you know- Get a loan and buy more Bitcoin, and with that increase the, the amount of Bitcoin in the treasuries." }, { "speaker": "stephan", "time": "47:25", "start": 2844.92, "text": "Gotcha. Yeah. Now, of course, people should be aware about things like LTV and also like liquidation and margin calls and things like this. So can you just explain a bit about, like, what are the, the typical thresholds that you use? Do people modify that or is it just like a set LTV and a liquidation?" }, { "speaker": "max_k", "time": "47:43", "start": 2863.17, "text": "We have, currently we have a default, LTV liquidation Margin rate ninety percent. So, the, the LTV you can use to borrow for fiat, it's fifty percent default by default. So in order to borrow, let's say five million worth of BTC, you need to put ten million worth of BTC." }, { "speaker": "stephan", "time": "48:03", "start": 2883.12, "text": "Yeah." }, { "speaker": "max_k", "time": "48:04", "start": 2884.28, "text": "And for stable coins is from thirty to seventy percent, meaning that you can borrow against ten million and you can borrow anything in the range of three million to seven million. but we are going to release a new feature pretty much soon where every lender will be able to, put their own like LTV and margin call levels. So it's not gonna be like fixed, you know, you can, you will be- It's very like" }, { "speaker": "stephan", "time": "48:30", "start": 2910.14, "text": "manual, they can set what they like, yeah." }, { "speaker": "max_k", "time": "48:33", "start": 2912.58, "text": "Yeah, they, they can set any term. So, I mean, some lenders might say, \"Okay, we, we're not gonna liquidate, Bitcoin at all. I mean, we have some capacity to withstand any type of- Of volatility, and we're gonna liquidate at ninety-five percent, which is really high liquidation, liquidation rate, right? Yeah. Some of them will say, \"Nah, we, we, we wanna liquidate in fiat or we wanna liquidate in stablecoin, we want to have like more, more room for volatility, and we're gonna liquidate at eighty percent or eighty-five percent.\"" }, { "speaker": "stephan", "time": "49:08", "start": 2948.33, "text": "Yeah. So" }, { "speaker": "max_k", "time": "49:09", "start": 2948.65, "text": "it's up to lender, it will be up to lender to decide, how they wanna build the margin call system and the- Liquidity system, and then it's up to borrower to go out and, and decide like whether I'm fine with this offer or I wanna have this offer." }, { "speaker": "stephan", "time": "49:24", "start": 2963.62, "text": "Yeah." }, { "speaker": "max_k", "time": "49:24", "start": 2963.8, "text": "And also with, with the, with, multisig. it's not happening like automatically. That's, that's the good thing for the borrowers, because at the moment it's like some of the processes are auto-automatic and some of them are still like, you know, requires the double-checking and signing from involved parties, you know, the release of collateral in favor of the lender in case of liquidation. and what we're going to, release pretty much soon as well, there was demand from, from, from, from few, few of the lenders, is that there will be a feature which will be called delayed liquidation, which means that even if you're liquidated, you will still have like twenty-four hours or maybe even forty-eight hours to negotiate with the lender that, I mean, I don't know, I was sleeping, I was flying, I don't know, I was, In the woods, and I missed the, the price action, so maybe I can repay you in part, repay fully, or maybe add a bit more to collateral so you will be able to avoid liquidation if lender is happy to take that risk." }, { "speaker": "stephan", "time": "50:32", "start": 3032.12, "text": "Gotcha. And then I guess the other question that, now, again, thinking from the lender's perspective here, he will probably think I've got to place a bit of trust in Debuffy's execution here, right? Because let's say the price hits a certain level, I'm placing a bit, a bit of trust in your, let's say your execution engine to kind of do the liquidation or whatever if they've set certain percentages. So can you just explain a bit how that works, at least at the Debuffy platform level?" }, { "speaker": "max_k", "time": "50:59", "start": 3059.47, "text": "well, it's like, it's, it's a technical. I mean, we use a very robust price oracle. First of all, that's, that's a crucial and important. Anything that goes with lending, you need to have a strong price oracle, and we use it. It's a public information, I think we use multiple, it's twelve or fourteen different, exchanges in the world, like mostly good. And you take like an average of" }, { "speaker": "stephan", "time": "51:23", "start": 3082.72, "text": "those, yeah?" }, { "speaker": "max_k", "time": "51:23", "start": 3083.46, "text": "Yeah, and we take average. So in case one of them having some issues, it's not gonna impact the liquidation cycle because it's just one. So only if there's like a massive price action and there's a consensus am-amongst majority, then it could happen, I mean, liquidation. And then again, as I said, even if you're liquidated, it doesn't mean that collateral, left the escrow already. It usually requires a certain, action from the lender perspective, so you need to go online and sign the release transaction. so there's always a room of nego-- to negotiate, renegotiate the terms." }, { "speaker": "stephan", "time": "52:02", "start": 3122.27, "text": "Gotcha. And," }, { "speaker": "max_k", "time": "52:04", "start": 3124.49, "text": "yeah, everything else is happening automatically. So as soon as the margin call, the final margin call hits, you know, we move the, the- the contract in, in the stage of liquidation, which means that at this point borrower doesn't have any option to sign Or pre-press anything, but you can chat through the contract chat and you can just try to negotiate with the lender. But again, as I said, and I'll, I'll continue saying, you know, there's no magic pill or there's no magic stuff happening. It's a market, it's a lending market. You can be liquidated, so you need to do your own risk management. And I always say, if you're considering borrowing Never borrow against your, all of your Bitcoin, you know. Borrow against part of it because you might need the, the second part in order there's like, again, huge volatility and huge price action, you wanna avoid liquidation so you can put bit more to the collateral and rebalance LTV, which happens automatically on DeFi because you can send a bit more Bitcoin to the same address," }, { "speaker": "stephan", "time": "53:15", "start": 3194.87, "text": "right?" }, { "speaker": "max_k", "time": "53:15", "start": 3195.39, "text": "Yeah, and our system will rebalance Sell to be automatically okay. Look," }, { "speaker": "stephan", "time": "53:21", "start": 3200.83, "text": "Stefan, you put more collateral in, therefore now your LTV has come back into the safe range or whatever. Yeah, yeah," }, { "speaker": "max_k", "time": "53:26", "start": 3206.25, "text": "yeah." }, { "speaker": "stephan", "time": "53:27", "start": 3206.87, "text": "Okay. And now, another question from the-- Now, if you're on the lender side of the house here, let's say you are a person who's borrowing against Bitcoin for living expenses, now that person may want to keep rolling it over, right? So let's say at the end of that one year term or two year term, he may, he might wanna do another one or another two year term for a larger amount Explain how that would work. Like, does your system, does the platform have that, or is it more like a manual thing that the borrower would have to find, an offer to do a rollover? you can, you can, you" }, { "speaker": "max_k", "time": "53:59", "start": 3239.0, "text": "can just, first of all, you can just, send a message to contract chat, to, to the lender. In fact, we have a contract chat available through the website, but it's gonna be available through mobile app next week, so again, on the go, right? You can just send a" }, { "speaker": "max_k", "time": "54:18", "start": 3258.35, "text": "Roll over. So we, we allow rollovers, and that's actually happening quite frequently on DeFi. what we're gonna do, we're gonna build bit more features for the borrowers. So the, first of all, there will be an opportunity to automatically request a rollover, so you just press a button and lenders notify that, hey, there's a, there's a, there's a request to do a rollover. Secondly, as I said, and there will be more and more underlying like Features, if the-- your lender, you know, says, says like, \"Hey, I'm not gonna do the rollover, \"then we will be able to find you another lender, and just allocate your offer in our internal lender list, so it's gonna be like fully automatically. Then, as I said, it's gonna be twenty-four month period, so, I mean, though, I envision there will be a bunch of lenders that, will be able to offer twenty-four month period, so you don't need actually to do the rollover after twelve months, you just can Continue, you know, your contract. And then, we also building a feature which will, which we are calling, it's like counter offer, where borrower can, find an offer on the public offer list and maybe he doesn't like duration or maybe he doesn't like the LTV ratio, then you can just make a counter offer to the lender, and if lender agrees, you got your, you got your deal. If he doesn't agree We're gonna publish your offer and send it across the board to other lenders, so maybe someone, some of them will pick it up." }, { "speaker": "stephan", "time": "55:52", "start": 3352.44, "text": "Oh, interesting. Yeah. So in a way, it means maybe you're not as, let's say, captive to one particular lender that you can sort of, like, in a way, that kinda helps, the market be a bit more, let's say, competitive, as opposed to kinda being stuck in with one partic-particular lender. So that sort of one particu- yeah, one particular lender. So, interesting dynamics Final question, where, where are you looking? Where do you think this goes? I, I think, there has been a lot of growth in this whole Bitcoin lending, borrowing market in, you know, the recent This year, basically, that's what I, that's what I'm hearing when I talk to people. so where do you see it going over the next, you know, four or five years? What's your, prediction of, how big this market gets or anything like that?" }, { "speaker": "max_k", "time": "56:43", "start": 3402.52, "text": "I mean, predicting the market size, I think it's gonna be really huge, and I think any prediction that you're gonna make now as, as it was with Bitcoin, you know, it's just, it's just gonna outperform any, any type of prediction. So I think the Bitcoin lending market will eventually become large, very large. It's like, it's super huge because it's like It's a perfect storm in a way that, again, you have the super collateral which is highly liquid, tradable, you know, you can liquidate any, any point of time. It's decentralized, it, it's fully transparent, and it could-- you can build a lot of interesting tools in a way like custody and, and et cetera, et cetera, and, and transparency as well. I think there will be a definitely number, number one prediction, the rates will go lower. Maybe, it-- maybe it's not gonna happen like instantly. Maybe- Maybe next week, next year or next week we're gonna see some bear market, you know, and the rates will stay the same because there will be like risk, risk will increase. But eventually, if we're talking about five to ten years, I think the rates will go lower and we'll see single digit rates. and we will see single digit rates not for the like large whales who wanna borrow five, ten million, maybe hundreds of mil. We're gonna see lot-- single digit loan, rates even for smaller loans like five thousand, one thousand, I don't know, ten thousand And I think definitely the non-custodial space will grow and the multisig based lending will grow and it will, it will outperform, again, any type of expectation because infrastructure is there, it's built, it's being built. we are moving with DeFi really fast and I think more and more tradeFi or more and more custodial lenders will start offering non-custodial feature to their customers because we have some of the custodial lenders that coming to us and saying, \"Hey guys, we have these custodial lenders, custodial services, you know, people custody Bitcoin with, with us, and they are, you know, and they, they are like borrowing against it, but we see that there's a huge part...\" Of the community, huge part of our potential customers who don't wanna use us for the reason because we custody their Bitcoin. They wanna use something that you guys did, and, effectively they're ending up, you know, talking with us how we can provide infrastructure." }, { "speaker": "stephan", "time": "59:05", "start": 3544.98, "text": "Right. They might sort of white label your platform and have it inside of their app and things like this." }, { "speaker": "max_k", "time": "59:10", "start": 3549.72, "text": "They, they will, they will do that because this is, this is also the path we're moving into and direction we're moving into, because again, we are lucky to- That we're not liquidity provider, we're just technical provider, and we can be very flexible on the way what we build, how we build, and to whom we are building this stuff. And, I think that at some point you're just gonna, you're gonna see multiple custodial platforms offering non-custodial services. Hopefully they're gonna do, most of them is gonna do this through DeFi. because again, we're not competing with them, we're not trying to get your customers, we're offering an extra service, an extra feature that would just gonna bring you more and more customers, will make you more and more money, and event- effectively it's gonna just open a new markets for you. Because again, we did our research year ago, we've asked three, three hundred Bitcoiners a simple question, if you're, if you're gonna borrow, you have two options. One of Options you're gonna choose. One option is like borrow with eight percent interest rate, but you're gonna custody your Bitcoin with a custodial service, and another option was borrow with eleven percent, but custody through multisig. You know what? Ninety percent of, of Bitcoiners said I would prefer overpaying for that loan, but having a certain level of control and borrowing through multisig. So that's how much of customer you are missing if you're a custodial service." }, { "speaker": "stephan", "time": "01:00:36", "start": 3636.35, "text": "Yeah, people are willing to pay a lot more for it. And I think it's interesting to see, see the evolution of this because, you know, a few years ago, obviously, you know, Celsius and the BlockFi and the FTX and the, and the Grayscale, all that stuff, Three Arrows Capital, whatever, you name it. That was very top of mind for a lot of people, but I think now there's so much excitement as, as we kind of come, come back to the beginning of this conversation, the treasury companies and lending, and why is that? Because Bitcoin is growing massively, like, you know, at current non-powell or it's like forty percent at least, you know, this year, obviously it's coming down over time, but if Bitcoin is growing at, call it thirty-five, forty percent a year, and people can borrow at like twelve percent You know, it doesn't take a genius to figure out that, there's a business model there, and that's why there's so much excitement. Now, of course, listeners, don't get wrecked, be responsible, don't borrow against your whole stack. You know, you should be conservative and think about, you know, what is your income, what is your net worth, what's the percent of your coins that you would be willing to, you know, do this kind of thing with. but the way I'm seeing it, it can make sense, but you segment, sector, let's say, and I think you're right that the lending market is going to grow dramatically over the next four to five years. so I think we'll leave it there. listeners, check it out. The website is, let me get it, it's debify dot com, and, people can follow Max, I'll put the links in the show notes. Max, thank you for joining me today." }, { "speaker": "max_k", "time": "01:02:09", "start": 3729.3, "text": "Stephan, thank you very much. Pleasure, pleasure to talk with you, pleasure to see you in Riga. Cheers, see you soon." } ] }