TFTC: A Bitcoin Podcast - #362: Debifi with Max Keidun

Episode Date: October 3, 2022

Join Marty as he sits down with Max Keidun to discuss the new Debifi platform. They also discuss the Baltic Honeybadger Conference and future prospects for Debifi and Hodl Hodl. Follow Max on Twitter Check out Debifi Shoutout to our sponsors: Unchained Capital Braiins HodlHodl CrowdHealth TFTC Merch is Available: Shop Now Join the TFTC Movement: Main YT Channel Clips YT Channel Website Twitter Instagram Follow Marty Bent: Twitter Newsletter Podcast

what's up freaks it's your boy marty here to introduce this rip of tftc i sat down with max keaton from hodl hodl to talk about his his new company debify which is looking to bring similar multi-sig collateral tools to institutional capital providers liquidity providers pretty big product great conversation i think you guys are going to enjoy it it was brought to you by good friends at hodl hodl disclaimer max is the uh founder and ceo of hodl hodl which is also a sponsor of this podcast lend.hodlhodl.com is where you go if you're looking to take out a loan in a peer-to-peer fashion with no KYC, no AML and low rates. What you do is you put your Bitcoin up as collateral in a two or three multi-sig escrow account. You get stable

coins back in return. And as if you pay back your loan plus the interest associated with it, you're going to get your sats back at the end of the day. And you can have certainty that you're going to get your sats back because you're going to have certainty that your sats are not moving, that they're held within the two or three multi-sig escrow account because you hold one of those keys so you have visibility into the wallet. Again, no KYC, no AML, peer-to-peer, low rates. Go to len.hodlhodl.com. This report was also brought to you by good friends at Unchained Capital. Unchained is here to change the game for how you buy Bitcoin. This is the best way to buy Bitcoin now. Unchained has brought it to you. You set up a two or three multisig

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by our good friends at Brains. What can I say about Brains? I'm thankful that they exist. Their products are incredible. They've been around for over a decade now. The start is Slush Pool, then Brains acquired Slush Pool,

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if you talk about a fed just gone nuts all all the central banks going nuts so it's all acting like safe haven i believe that in a world where central bankers are tripping over themselves to devalue their currency bitcoin wins in the world of fiat currencies bitcoin is the victor i mean that's part of the bull case for bitcoin if you're not paying attention you probably should be max are you well rested uh to some extent yes i am yeah well i think i should start off by giving you a round of applause and a big congrats the uh the Baltic honey badger conference was a great success. Thank you.

Thank you. It's one of the most high signal conferences in the world that I've been to. I've been to quite a few of these conferences. Thank you very much. It's definitely not the largest one, but, uh, we,

we stick to the core. We stick to the roots. And, uh, as many people say, it's the most Bitcoin OG conference out there. Yeah. I mean,

the quality of people that you get to that conference is extremely impressive thank you for allowing me to participate it was a lot of fun thank you for being there and helping us you've been amazing with all the

all the panels all the talks everything so I thank you as well I mean I get to nerd out I get to sit up there talk to Adam Beck Peter Todd, Eric Fosgiel Giacomo So it was a lot of fun.

That was a blast. That was actually one of my favorite parts of the conference. The unpopular opinion panel. That was a blast. Honestly, thank you very much. No, thank you for having the panel. A lot of these conferences just want to fluff Bitcoin and not really broach the subject of the more controversial topics.

of what could go wrong and how is bitcoin weak where is it weak and it was a lot of fun getting on stage and talking through a lot of those topics and it's funny because you see like these extremely smart people who are working on the protocol have very different views on on how it's gonna unfold moving forward yeah that's that's basically one of the reasons what i love the most about Baltic Honey Badger, that there shouldn't be only good and nice stuff told during the conference, because conference itself is about Bitcoin. We're not inviting any other blockchain participants, I would say. We're only inviting people who are interested in Bitcoin. And I actually love inviting people who are thinking more critically about Bitcoin than others.

Because there's a lot of people who love Bitcoin and they have these pink sunglasses. There's this Bitcoin and it's perfect. And there's people like Eric Lospool or Paul Storrs, which I respect them both. And they have their own opinion. and they're pretty critical and it's important to hear both sides of the dispute if there is a dispute of course but the main thing is that we gather people who love Bitcoin

and they're tired of all noise surrounding that and they just want to discuss they want to just learn something and they want to share their opinion that's the main reason yeah and I think there's a lot of value of getting these people in person too and having these conversations in person

because obviously in the Bitcoin world, a lot of the conversation happens on Twitter and it can get vitriolic there and there's only so much that can be said and 280 characters and there's a lot of assumptions of how people think of each other on the internet. But once you get them in person,

the conversations tend to be pretty civil. And I think it's much more productive to do all that in person it is it is in fact uh like 90 percent people are different uh in real life uh and then then even crazy bitcoin maximalists as they as they say uh they're like these are most humble intelligent people out there that i personally ever met so like and you know it's crucial and it's important to gather at least once in a while together in in offline in meet space and to to network to meet each other and to share your your thoughts and ideas yeah no it's fun i mean selfishly for me it's just always fun hanging out with eric

and having him just be the ardent literalist that he is in real life and definitely you know he makes you think yeah you know what he told me uh when when after the come after this year's conference he told me why you always invite me to an unpopular opinion panel and i told him like eric you always have an unpopular opinion this is basically you have reserved almost for the lifetime the spot on this panel you will be always there as long as you come to baltic honey badger so yeah we'll laugh together and uh yeah he understands but it's it's really nice to have everyone again thank you everyone for coming and supporting us yeah shout out to you shout out to anna and everybody at hodl hodl through that together it's it's a other thing too it's like

very uh well organized and well oiled machine too which is a good conference yeah it is because it's it's our fourth time also we we want to keep it in riga because we know everyone and it's like we've been working with same people from year to year and and also the good part is that we're going to keep uh honey badger below 1000 attendees like we decided that it's going to be most probably our policy for as long as baltic honey badgers there this will be our policy so it's limited but hey there's uh there's not there's less noise and more signal and people get to get around and they get to speak with everyone and meet everyone so yeah this helps yeah and riga is one hell of a city too it's a beautiful city that was um because i hadn't been

this is my first year going since 2019 or 2018 maybe even um you know i forgot how incredible riga is as a city it's just incredibly great small beautiful city over there in eastern europe thank you in the baltics um yeah i mean you had a big announcement at uh at your conference debify it's finally launched finally out there or in the public sphere it's it's it's in the public space it's uh we only launched uh basically the landing page uh with small description what it's all about and i just briefly announced that uh most of the time i was actually speaking not about the product announcement because we don't like and we don't allow shilling openly your products on the on the baltic honey badger because it's not about like marketing and your own stuff

it's about bitcoin uh so i had my talk about why bitcoin is a super collateral and why it should be and uh part of the the biggest part of that talk was why i believe that lending industry i mean bitcoin lending industry should be redefined and we need we need to find new solutions and And hopefully, DebiFi will be a new solution that will allow to tackle a majority of current problems and issues in the system. Yeah, so let's jump into it. Obviously, you founded HodlHodl, and that has been a very successful platform from the peer-to-peer trading and lending side of things. You have lend.hodlhodl.com. um why did you decide to iterate on what you built at huddle huddle and and think about debify

well huddle huddle first first uh firstly huddle huddle and landed huddle huddle which we consider one project like both trending trading and lending part uh these both are mostly for retail market So it's pure peer-to-peer, you know, person-to-person or pleb-to-pleb, whatever, name it as you want. And while DebiFi is a different kind of beast, we want to actually tap into institutional markets. And DebiFi is a lending platform with the same core principles that we have in all our products. So there's no middleman. it's going to be non-custodial meaning like no wallets no custody no nothing we use multi-six proven well well-designed multi-six and it's going to be bitcoin only but the tricky part is that

there will be different level of and volume of liquidity on debify because lenders will be only institutions and those big institutions will be able to start lending money using bitcoin as a collateral and helping bitcoiners globally all over the world not to sell their bitcoin and not to give bitcoin to the custody of other platforms or custodians or other lending products which is a bad thing to do because you know not your keys not your coins we know that everyone knows that we learned that lesson this year yeah the people learned the lesson and market learned the lesson hard way as as it usually do you know we've been like running around for a couple of years since uh launching landed huddle huddle saying that this is bad you shouldn't do that

but hey people never learn and if they learn to learn it's hard way you know look at what happened with celsius voyager babel whatever just name it and uh well we have uh we started to develop this project actually a year ago long before the the current contagion 2022 and we just understood that the system is uh i mean bitcoin landing is broken and uh using custodians was always a no-go for us. And I believe it should be no-go for market as well. And another reason is not only we want to show that using non-custodial platforms is as easy as custodial platforms

and on the magnitude level is more secure, but we also want to bring institutional liquidity into Bitcoin because now we are losing to some extent. I mean, Bitcoin lending is losing to shitcoin lending because there's a lot of shitcoin protocols and lending platforms that are actually having much more liquidity. It's true.

Let's be realistic. They have billions in liquidity. And Bitcoin in that sense is actually losing. The only comparable liquidity is going through custodial lending platforms platforms which is as i mentioned is bad thing to have yeah and i mean so let's jump into why do you think the shit coins have one out is it a ux thing is it maybe ux thing maybe Maybe better marketing, maybe Bitcoiners actually wasn't considering lending to be an important

and crucial part of the equation, you know, part of your day to day activities, part of the services that you actually use. And when suddenly last year we had the value of Bitcoin skyrocketing, people were like thinking oh shit i don't want to sell we're at 40 000 now we will be at 50 000 we will be at 60 000 i don't want to sell i want to borrow against bitcoin because i do understand the value of that asset i do understand there's only 21 million i do understand there's like limited limited amount will be released or mined and i don't want to sell that that's basically generation of wealth i want to pass it further and the only thing i'm happy to do is borrow against

that and like in the last two years the lending industry was actually growing pretty good uh we also saw it on uh at our lending platform as well so people were understanding the value of not selling and borrowing against bitcoin and using bitcoin as a collateral uh yeah but shit pointers they just um i believe honestly they they were just first to understand the value of of lending protocols and um most of them are also having a non-custodial principle so you can partially own your own keys of course we're not going to discuss how shitty those protocols are and inherently inherently dangerous you know on on the base level you know you can build uh like like spaceship on on uh out of the pile of the shit but it's still going to be a pile of the shit and um well i think

that bitcoiners may be being too conservative and uh maybe being mostly focusing on on getting more bitcoin and then at some point you just understand like well uh you never have enough of bitcoin but at some point you understand that you need to have fiat or you need to have stable coins or you want to buy more you want to increase your position and then borrowing against bitcoin comes into play and then you start looking for options and basically the option to borrow against your bitcoin in non-custodial fashion is very limited there's there's basically two three platforms out there like land unchained capital and maybe a few more um i'm not familiar with them but maybe they exist but there's again there's an issue liquidity if you have like 100 bitcoin and you

want to borrow against 50 bitcoin and you're not based in us for example you're based somewhere in euro where some of the platforms actually don't operate and they cannot issue loans to you in euro and you want to do it in through a non-custodial fashion then you basically have no choice you can't do that because some of the non-custodial platforms are limited to certain markets and they only issue like in us dollars for example uh landed huddle huddle we only we only provide services in stable coins and this is not us providing services it's it's actually people providing giving liquidity to other people and also as i mentioned this is mostly retail focused product and we have a cap for a single contract which is 25 000 so you so you are

getting with a huge problem you as a european or as a participant of the market outside of us you don't know where to go and your only option is a custodial lending platforms and in fact there are a lot of markets in the world where even custodial lending platform is not an option because they don't operate in that market they don't have a license they don't have liquidity they don't operate in certain currency they don't they don't do that and so you are stuck either sell or you know hold forever which is not bad things which is not bad thing to do but you don't have liquidity right yeah so um and we figure out that we should build solution uh which is highly scalable like globally scalable because debify is not about

giving a liquidity by ourselves we just provide tools for liquidity providers so the best part one of the best parts of debify is that actually lenders will be institutions and these will be institutions in different markets. Let's say you're a Singapore-based Bitcoiner, you want to borrow 100 against your 100 Bitcoin, and you want to borrow in local currency. If we have a Singaporean authorized bank or hedge fund or whatever, liquidity provider, you can easily do that through debify if you're in brazil and you want to borrow in brazil real and we have an institutional liquidity provider there you can do that we don't need to find we don't need to obtain a license for ourselves we just need to find a partner with license with liquidity and

with will to tap in into the market of bitcoin lending and that's i'll be honest with you that's far more easier than going through the route of having a license in every particular market bringing liquidity and that's actually way more less riskier than that it is at the moment so this product what we're building will be a global landing aggregator of liquidity yeah and from the liquidity liquidity providers perspective it's pretty low risk considering the security model that multi-sig provides and that multi-sig is securing bitcoin which is super collateral which is a term that you and i both like and really believe is is one of bitcoin's first uh killer applications is this this use of

super collateral since it's um highly divisible very easy to send and you can create a security model around multi-sig that really gives the liquidity provider assurances that if the person they're lending money to winds up going belly up they're going to be okay because they can see the collateral, they can see it's secure. And if worse comes to worse, they're going to be able to get their value back. Yeah, and we will have multi-sig, but again, there's twists for that particular multi-sig and

DebiFi, there will be four signatures. One goes to Lender, one goes to Borrower, one goes to DebiFi itself. And four signatures will be held by our partner, who will be a fourth key holder. We have announced them as well. It's going to be either Blockstream, Casa Jodl, and Gen3, which is a new company by Samson. We're also in talks with several others. they will hold the fourth key which is a backup key and consensus mechanism will work with three

alpha four so basically you need to have at least three signatures to move funds from collateral and of course it's going to be supported from the start with all the hardware wallets so you will be able to to store your key from that multisig on your hardware wallet and we're also planning not planning we're actually developing already a standalone application on your mobile phone in case you don't have a hardware wallet you will be able to hold your keys in a mobile wallet which will be specifically designed only for holding keys to debify multi-six in your mobile phone so there will be not only new consensus mechanism which is more secure because even if we even if we consider that lender and borrower are compromised somehow

then it's still not enough to move funds from collateral right because there's only two keys so you need to have third one uh which both of them uh are stored safely and securely in cold storage so yeah that's uh that's not only going to be way more secure than existing options uh on the market that's not only going to be highly scalable liquid and all that stuff but it's only but we're also building it in in in that sense that is going to be easy to use you don't need to like you don't need you won't even understand that you're using multisig right you are going to there will be an interface just like now when you're using land at huddle huddle or hodl hodl trading part most of the people there there have been cases uh that people don't

understand that they're trading to multisig they they think that they're actually sending their coins to wallets that we control uh although we don't control anything we just hold one key and provide technical solutions for that yeah and so what's like when you think about debify and getting it adopted by these institutions that will then lend out to people living in their jurisdictions what what is the incentive for one of these liquidity providers to to provide liquidity to bitcoiners looking for for loans uh well bitcoiners they they don't want to sell they don't want to sell they they just want to hold to their bitcoin and most of the bitcoiners they are ready to overpay if you will compare the rates uh for like let's say real estate uh

lending rates and uh crypto lending rates or bitcoin lending rates usually bitcoin lending rates are higher than real estate lending rates best first thing so first option and first main reason for bankers to start exploring bitcoin landing is that they actually can earn more money The second thing, as you mentioned, is that Bitcoin is a super collateral. It's highly liquid. If you're a lender and your borrower gets liquidated, you can instantly sell that on any centralized or non-centralized platform out there and get into fiat. It's not like with real estate where you need to wait months. You need to auction this.

You need to do this, that, and that. And most probably when the time will pass, you will lose the value of your collateral. With Bitcoin, it's instantly, you know, the person gets liquid aid. You can send it right away to your exchange account and you can sell it right away for fiat and fix your profits. Right. And in DebiFi, actually, there will be an option to hedge your risk. We have a partner for that. So there will be no volatility issues for bankers, for lenders. So lenders will be able to fix the Bitcoin price at the moment of liquidation.

And they won't be worried about that the price is dropping or effectively price is rising. So that's a game of two ways. And the third thing is that they will be able to do it directly. So they will be able to issue loans directly. Thus, there will be no middlemen. We're effectively eliminating middlemen for middlemen. Now, if there is a bank at the moment who is willing to go and, you know, to earn some money from Bitcoin loans and earn some money from Bitcoiners in order to start issuing loans or in order to start playing on the Bitcoin lending market, they need to go to a centralized service provider, let's say like to BlockFi or any custodial platform out there. they will give their liquidity to that centralized liquidity provider and there's that's a risk first

of all your liquidity your money is uh with a third person with third company i'm not saying the company is bad but we all saw what happened with celsius i don't think that only borrowers uh were uh were victims in that case there's most probably there's a lot of there's a shit lot of lenders out there who are running and trying to get their money from Celsius, most probably. So that's the first thing. There's custodian risk for even for institution. There's always a custodian risk. You know, as long as you handle your money, even if it's fiat to the third party, there's a high chance or there's a small chance, but there is a chance that you will lose that money. That's the first thing. And the second thing is that middlemen will always charge you

some extra fees because they are doing their part of the job. So if you will go to custodial lending platform, give them your money, they will probably charge from your interest payment some money to their pockets. While in this case, in this solution, you will have a direct approach to the borrower and all interest payment that you will receive, you will receive in full from the borrower directly to your wallets yeah so it's you're the lender saving more money and then most importantly what really excites me about this is like you mentioned the way the lending market is developed today to you have credit funds giving a bunch of money to centralized lenders who are taking bitcoin as collateral and then giving the money out and

And you're essentially, as a liquidity provider, allocating due diligence to these firms. And as you mentioned, the Celsiuses, the Voyagers, the Babels of the world have proven not to really have good risk management in place when it comes to lending the liquidity that these lenders are giving them out. Yeah, it's true. And actually, many people were saying to me like, hey, banks don't understand that. Well, after our announcement, we've been approached by, I think, around 10 different banks globally, family offices, banks, hedge funds, that they actually understand that. And they're actually looking for a solution, how to implement, how to start offering, using Bitcoin as a collateral for their customers, or how to tap into that market, or how to give their liquidity and earn extra money with that. So they do understand. And actually, one of the reasons why we decided to go to institutions is that like six months after we launched Landed Hottel Hottel, we've been approached by one Pacific Asia based bank who was actually exploring an opportunity to use our platform. and they're still exploring and to start providing liquidity in their own region

because region is unrepresented in terms of Bitcoin lending. And yeah, that was one of the reasons why we decided to also to develop DebiFi and to release it and to help institution to get on board actually, to understand how valuable Bitcoin as a collateral is because it's truly valuable. yeah so i mean it's super collateral but as you mentioned um at hodl hodl you build a suite of tools that people can interact with to to get liquidity at a retail level similarly at debify this is this is how you're pitching it okay we're just building a suite of tools that you guys can tap into to build this infrastructure to offer these types of products so i mean you've mentioned

the the four key setup but how are you viewing the onboarding of these institutions what's it going to look like for an institution that wants to um adopt debify's toolkit well we will have an api and there's a basically there's two way you either get onboarded to the platform directly so we have a process internal process how to onboard institutions basically not going to take more than 2-3 working days in order to start

you know giving the loans or you can take our API which will be released at the same moment when DebiFi will be released and you can build your own solution or integrate DebiFi into

your own online bank or whatever you prefer to use so there's two ways uh and uh both of them going to be pretty easy both of them going to be guided by us helped by us so we've been actually i would say that we're pretty experienced in onboarding people to non-custodial solution particular to bitcoin multisig we do understand the pitfalls we do understand the problems we do understand how people think we do understand how to explain this to them so there's like there's no magic pill or something like that it's pretty easy straightforward and you just need to spend some time with the person or with organization for them to understand how valuable this is

yeah i mean and we mentioned the impact this could have particularly for individual bitcoiners living different parts of the world that don't have these types of products and services available to them at the moment but what what's like your grand vision of the effect that that debify has beyond that what do you think this does for for the market for bitcoin specifically well it's uh as i said i have uh well i read your tweet last year and and your your thoughts align with mine that bitcoin is a super collateral actually and i think that in next 10 years one of the main use cases for bitcoin will be proving that bitcoin is a super collateral and if we want to bring an institutional liquidity global liquidity i mean not not uh particular banks you

know which are actually operating on the market once in a while you know but i mean global markets like banks from Asia, banks from Latin America, Africa, Europe, US, whatever, Australia, name it. Then we need to have a solution which bankers will understand and they do understand lending. They do understand making money from loaning money and from lending stuff. So that's the best use case to actually bring the institutional liquidity to Bitcoin to increase the mass adoption because imagine like in five years uh because of debify maybe there will be a lot of similar products whatever we we don't care we like it's going to be a good for the market because market is huge and liquidity is huge out there you know there will be enough

space for everyone but imagine that there's no longer an issue to go to your banker and to borrow against your bitcoin just you just like you can borrow against your you know house or car or or against your salary or whatever you know you can just go to your local bank and if you need money you can say hey i have like one bitcoin uh the value of one bitcoin let's say in five years is one billion i want to buy a new house like so bearish uh okay 10 billion i i want to i want to buy like house or or whatever i want to buy and you go there and he's like okay we understand that there's no questions there's no issue you know here's uh we we operate through debify or any other platform let's do that and the best part is actually that you don't need like with

real estate there's usually a longer process of borrowing money against your real estate there's usually people who come to your house they they do analysis they do evaluation you know they they do that and this and there's a lot of paperwork and all this bullshit and this takes a lot of time uh with bitcoin it's very similar uh not not similar it's different it's it's simple uh you just uh you have the value of bitcoin which is current value and you can actually borrow against that instantly same way as i mentioned for lenders you can liquidate it instantly you can borrow against it instantly there's no like person who is going to evaluate uh your bitcoin is good or your bitcoin is bad there's just bitcoin you know there's just bitcoin it costs like 10 million and

you want to borrow against that and that's straightforward and simple yeah yeah and like in the context of other loans too like if you're loading against your salary there's risk with that from the lender's perspective because like oh is he going to lose his job is he actually making this money because this this pay stub he's been showing me like actually what he's going to be getting in the future and with bitcoin it's like no he has utxos um it's it's in this multi-sig escrow and it's there so we can verify that instantly and and release liquidity instantly it is it is still baffling that that the broader market does not recognize this inherent utility from from a collateral perspective i think that's uh the broader market was actually

We experimented with Bitcoin and proving we are actually, we Bitcoiners and the whole community, we were mostly focusing on trading, buying, selling, you know, last 10 years or first 10 years of Bitcoin. It was, everything was about trading, you know, exchanges popping up. We have this, the main use case was proving that Bitcoin is a super trading asset. it is you can trade it 24 7 you know highly liquid again anywhere in the world no banking hours no nothing no holidays you know you want to trade trade right and now it's time to for another step and another step is to prove that bitcoin is a super collateral because uh one of the things why collateral is becoming valuable is that uh you the more people use it the more banks using it

the more valuable a sexual is going to become uh because there will be no issue to get a loan against your bitcoin and one of the things that that you mentioned like uh getting there's a problem with getting loan uh using your salary for example because they don't know where you will receive the same salary in one year, in two years, in three years. Of course, with Bitcoin, there could be an issue that in two years, Bitcoin value will go down. But there's always LTV ratio for that. And it's always win-win for a lender because as long as the LTV ratio is falling And if the collateral is liquidated, you can just sell and receive your money faster than you were expecting it because, you know, it's not it's just it's just going faster and faster.

With Bitcoin, there's pretty easy to prove that you actually have assets if you want to prove that, you know, there's no need to bank statements, right? uh salary your job plays how good is your job you know what you do how how uh how good is your company what are like uh future plans for your company whatever there's a lot of different factors coming into play with bitcoin it's simple i have it it sits in my cold storage or sits on on the other exchange or whatever it sits i have it you can easily evaluate it like almost instantly and i want to borrow against that because i have those assets that's it yeah no it's the the products we i mean obviously debify is moving this direction but you had sam abasi give a presentation at baltic honey badger what they're doing at hoseki they're

trying to help solve this problem as well now yeah matt and i were talking about it yesterday on rabbit hole recap it's like i myself personally uh in the past going to um rent a rent an apartment in new york city they were like asking for like proof of proof of funds i'm like trying to be like hey i like i'm a bitcoiner i i hold most of my my uh net worth in bitcoin and trying to prove to them like hey like i have enough money to cover if i if i can't pay my rent and back then three four years ago uh it would they would just laugh at me and so like seeing something like hoseki and debify sort of legitimizing the fact that that bitcoiners do have this this backdrop of um savings that they can use to actually go acquire things in

the real world is is massive it's adding utility for us which should entice more people into bitcoin it's like oh now i can buy bitcoin and use that as proof of reserves when i when i want to go rent a house or something like that yeah yeah it's true that haseki is amazing i really like the idea uh i'm sure that the implementation of that idea will be amazing and we're also like Thanks to Baltic Honey Badger, we know each other now with Sam and we're also in talks. So yeah, I think they're moving in the right direction, helping Bitcoiners use Bitcoin as a unique tool in order to rent a house or to buy a house or to borrow against Bitcoin. This is a pretty amazing use case.

Yeah. And in both cases, like what's really encouraging to see is that it's being done the right way, allowing people to access these services while holding their own keys, because that's as we described. so that's maybe what we can get to like a lot of people worry about custodial centralization throughout the bitcoin industry but i think we could easily make the case and you do make the case that moving forward like because of bitcoin's native properties particularly multi-sig like the better solutions are going to be like key distribution and um towards more distributed decentralized um key quorums yeah like uh it's also one of the reasons when we launched the the land at hollow there was some devil advocates particular in bitcoin twitter who was saying like hey but you can collude with lender or with borrower and you and you have two keys and

you can move uh funds from collateral because at land land at hollow the consensus mechanism It's actually two out of three. And of course, we have a reputation. Everyone knows HODL, HODL. There's no reason for us to do that because it's just dumb. Specifically for $25,000, you know, we've been developing this. Yeah, you're going to shoot yourself in the foot and all those future profits for $25,000. Yeah, yeah, yeah.

I know, guys, you think that everyone wants to fuck you, but not us, you know, right? And but yeah, that's a legitimate kind of concern, specifically if we're talking not about twenty five thousand, but if we're talking about millions, you know, imagine there's a loan sitting out there worth ten millions and you know that there's consensus mechanism two out of three. and actually your technical provider can collude with your partner and they can move this 10 million. Of course, it's a criminal case. There's a lot of stuff involved. But with new setup, which is three over four,

even if we imagine that the platform collude with Lando or Borwer, still not enough. We still need to have third key. so it's more set up with less trust i would say you know you don't need to trust us you don't need to trust lender in fact you don't need to trust even the fort key holder although these are big names and there's no interest for them to ruin reputation like that you know blockstream casa hotel there's like no reason for these companies to try and scam people uh so basically with a new setup there's less incentives in fact there's no incentives and there's no technical

opportunities to move collateral and to scam person out of his bitcoin so that's uh that's also one of the reason why we decided to go with three out of four uh mostly of course because uh the amounts will be bigger and because we're talking about institutions here and they're not interesting in issuing loans 25 000 worth of they would prefer like you know giving millions but also because that kind of set up not only more secure you need to put less trust but it's also will allow us to uh offer more long-term uh loan contracts you know five years maybe up to 10 years so this is like more uh this is this is also again one of the things that been uh circulating And people have been asking us with our existing platform, like, hey, maybe you can expand the term of 12 months, which we have at the moment at Lend and give us like five years.

so we decided we're going to build a separate product and landed huddle huddle which is we'll just stay for retail anonymous and for people to borrow and for people actually to give their liquidity as well yeah and like thinking about this if it gains steam i think it will gain steam and if it becomes more popular like you have to think just from a compliance standpoint for the liquidity providers they may at some point in the next two five ten years begin to prefer bitcoin as collateral compared to everything else just from like a pure paperwork and diligence perspective just simplifies everything like how much cost does this kind of save lenders at the yeah yeah basically you can you can you can create multiple loan contracts remotely you

don't need to do any paperwork the person doesn't need to come to your office you know sign papers and do whatever whatever they need to do right you can just say issuing loans you know sitting in one part of the world if you have an opportunity and and and you have a permission to issue loans to certain other parts of the world you can do that globally i mean like you know you can provide your liquidity globally so that's that's the best part you know that's the best part yeah and the key distribution too like i think back to when i worked at a fund and i was on the portfolio management team and we were indexing a bunch of different hedge funds together and we had to do individual due diligence on like literally where the servers of the hedge fund

where like what was their emergency plan because they were single points of failure and in this model where you have four different entities engaging in a three or four multi-sig like you can um it's not good to assume at all time but like the risk is more distributed and so yes it's de-risked significantly yeah it's true it's it's the beauty of multi-sig you know you can distribute the authority distribute the risk among different independent uh and entities and with different you know with different expectation but they will all serve the mechanism of consensus and they will all play by the game theory everyone should be acting as it is in own in his own interest but also in the interest of the group right yeah yeah and the um

and yeah now my mind's just like racing how's this going to evolve because i don't know it could be seen as controversial but like like lenders could even in the future like provide like i'm gonna go into the yield conversation but like so like say somebody wants to get yield on their bitcoin or they want to use their bitcoin as collateral for liquidity but they want a lower rate and what's with what's going on in the lightning network like you could see a potential future in which these liquidity providers have are accumulating a bunch of bitcoin from bitcoiners and they have all this sitting in escrow accounts and multi-sig escrow but they can go to the end user at the end day hey if you want a lower rate we have this

ability to lock some of your bitcoin up in a lightning network channel and running routing node that's getting fees that will put that bitcoin quote-unquote to work but considering the multi-signature of, uh, an HTLC on the lightning network, that's significantly de-risked too. Um, so there's a lot of different options in the future. And in fact, uh, I've just disclosed like the first, uh, first step for DebiFy there there's like, uh, when I'm going to announce our next step, uh, we're going to do a different podcast and I'm going to tell you, uh, a joker. we have a joker in in in our pockets actually not many people understand that but let's leave it for for next episode maybe okay uh yeah it's going to be really interesting but there's a lot of

different things that can be done in future with with those setups as for yield um yeah lightning In joint markets, these are all options that I think are legit, but in general, I'm against earning yield through custodial platforms, which was one of the issues why everything blew up basically. Because generally, people don't understand how yield is generated, and it's always generated through risky operations. of the time like 95 or even 99 especially if you're if we're talking about bitcoin and crypto right there's no there's no free cheese out there you know people you just need to understand that

if you're giving someone your bitcoin you know sending to their wallet first of all it's not as long as soon as it leaves your wallet it's no longer your bitcoin you just get used to that And secondly, if someone is promising you like 1%, 2%, 3% on top of that, then most probably they're gambling or they're risking with your bid. That's just, you know, there's like you cannot earn something without doing anything, right? there's no magic magic yield your uh earning platform where you just safely can send your one precious bitcoin and and in in one year time they will send you back 1.1 or 1.2 or whatever right hey you just give it to alex mashinsky and he uh he goes and he somehow he somehow produces the yield that's what uh many people had to believe yeah yeah mumbo jumbo and here's your yield right

yeah no it doesn't doesn't work like that you will get burned he does a weekly youtube show though i trust him it's uh yeah there's yeah marketing you know marketing is a good is a good thing uh and and some of these platforms they actually mastered the marketing stuff but you know you always need to ask yourself a question there's a probability that you can lose whole stack that you have sent to this custodial platform do you want to risk your whole stack let's say 10 bitcoin for two percent annual yield on top of that like ask yourself a question two percent hundred percent like the best yield strategy out there in most of the cases for bitcoin is just send it to your cold storage and forget about it right and that's it and if you

need to have some utility on top of your bitcoin go to non-custodial lending platform borrow against that get some liquidity you know spend it invest it do whatever you want but just avoid custodial platforms at all costs yeah and now my mind's racing too considering everything is a bit of a tangent not really related to what we're discussing right now but considering everything going on in global markets right now at the great british crown crashing the yen was crashing obviously what's going on in lebanon turkey argentina venezuela like and over here in the united states you had the fed talking about a soft landing but if something like debify really takes off and banks institutional liquidity providers begin

implementing your stack to provide liquidity to bitcoiners i mean this is in my mind the the best potential for quote-unquote soft landing is equipping these liquidity providers with the tools to allow people to use bitcoin to get liquidity in a hyper or i don't want to say hyperinflationary environment yet but a very high inflationary environment where if these institutions can add this tool to their tool belt to be a bit cliche there like it could provide very much needed utility to individuals around the world as their central banks and governments are debasing their currency in real time yeah and uh the good thing as i mentioned previously like they will get a taste of bitcoin through lending and who knows maybe at some point banks will start

you know accumulating bitcoin you know they will say we'll have reserves in bitcoin more and more because they will understand how valuable it is you know how easy to use it how programmable it is how you can be your be your own bank basically but you know uh you will finally have a property or an asset that you actually own you know you will be able to own your money as as we say uh for debify but but actually yeah that's i think that's one of the first major steps in onboarding banks globally to Bitcoin standard. That's the end game, probably. Because I honestly, I don't believe that the banks

and financial institutions are the final boss, you know, for Bitcoin to achieve hyper-Bitcoinization and, you know, to do that. You know, we all know who are the final boss, who make the rules, right? Who print the money. it's not it's not the bankers they just they just follow the rules and uh i'm a former banker myself and i know that uh i remember when we've been dealing with some of uh laws or some of the

rules that was made at that point and most of them were just making our life harder and harder not only life of our customers but also our life harder and harder and i think what bitcoin effectively can bring is also uh good old spirit of free market finally back to the back to the banks so i think it's only it's only a matter of time when there will uh be orange build and debify is one of the tools how to orange build now yeah these people are just operating within their incentives i mean it's the typical don't hate the player hate the game the game is is and bitcoin is here to change the game that's that's i mean i truly believe that over time people will transition to bitcoin because it's simply a better incentive game to be playing

within and that's another thing with debify too um and similar like non-custodial multi-sig solutions is it could quicken the pace at which adoption happens because it's less arduous for an institutional player who may not be as familiar with Bitcoin to begin adopting it because they have partners who really know what they're doing that are able to hold their hand

throughout the process that you don't have a bank or a family office having to figure out some crazy cold storage strategy by themselves. Yeah, you don't need to build your own technical tools. As for a bank, you know, if you want to play the game of Bitcoin lending,

you don't need to build your own technical tools here there are the tools out there just use that right you have liquidity we have a technical tools uh let's like just put them together and and make something amazing yeah and so what can uh what can the freaks expect uh moving forward what how how are things progressing at dubify uh well as an answer we are going to launch it q1 2023 so next year in the beginning of next year uh well as it usually is with technical development it might it might take extra months but we'll see hopefully soon tm yeah soon tm but we're pretty conservative and yeah we're aiming for q1 2023 uh we have successfully which i announced we have successfully closed the round thanks to 1031 you're you're you're wearing the hat and

disclaimer 1031 is an investor in typify yeah yeah we're very happy to be supporting you thank you we we have uh almost completed building the team uh because it's going to be a separate team and its separate entity so uh yeah most probably you can expect by q1 2023 uh mvp of debify going to lounge we have initial liquidity providers uh which will be bitfenix and xbto and uh first six months we're probably going to operate in stable points so you will be able to get big liquidity in stable coins and then gradually we're going to add uh fiat providers so there will be we already have them actually we just want to launch one thing and then launch another thing and then we'll have some third and fourth and fifth thing coming on but uh yeah most

probably beginning of next year q1 not the beginning most probably not january not february march but yeah we're we're building we're developing everyone is working and some great news is coming actually in the next few months some great partnerships so yeah stay tuned well i'm very excited um that you're building this product number one the progress that you guys made to date and honestly like this is something we need more of these products to get to market i think for the betterment of civilization times are pretty bleak right now and bitcoin is that beacon of light in this in this dark world and what we need to do as bitcoiners as people building companies in the space is equip as many people as possible with the tools they need to

to onboard as many people as possible on the Bitcoin as the Titanic is sinking around us. And so this is something I'm very excited to see come to market because I think it's desperately needed and will be a net benefit on the global society overall because people, people need the off ramp and this is a big stepping stone in that direction. Thank you. We're also excited.

we're also excited yeah what um what else is on your mind is there anything outside of debify that you're that you're interested in what's going on in bitcoin right now it's piquing your interest yeah we're going to probably in a few months from now we're going to announce baltic honey badger next edition which will be fifth one which will be a small uh small date five uh five honey badgers But yeah, this one and also we did an announcement during Honey Badger about our existing platform. So by the year end, we're going to completely redesign and offer a new version of trading platform, HoloHolo, a new version of our lending platform. we have also announced doomsday software which is another uh i think it's it's i would say undervalued thing that not many in market understand so we we have developed a doomsday

software which will allow you if you're a lender or borrower on on on on our existing platform land at hodl hodl even if the platform goes down because it's multisig you will be able to use it using that piece of software to release collateral from that multisig so even if the land at hodl hodl for no reason or any particular reason goes down let's say for a week or for one day or for a couple of hours you will be able to use that software outside of the platforms in order to get your funds from collateral of course uh with consensus from both sides so you need to have a lender as well or a borrower if you're depending on which side you are so basically this will create a a pretty amazing tool that that will allow people for more flexibility more

freedom and more security in that sense and another thing that we have announced a part of you know, redesigning, rebuilding all existing platforms and making them more user-friendly, easy to use, is that we're partnering with Trezor, a hardware wallet provider, and they're going to integrate hodl-hodl peer-to-peer trading to the Trezor, so you will be able to trade directly from your Trezor, buy and sell Bitcoin.

And of course, we're still working. hopefully there will be good news soon where we're working on bringing huddle huddle trading to US market hell yes at the moment only lending platform

is operating for US customers we want to have full suite of our products available for US so I hope this will happen in next six months something like that incredible doomsday stuff's very important um being able to do that offline just

again eliminating the custodian risk wherever you can um a website is one of those risks so it's incredible that you got an offer the uh the app to do that offline yeah Yeah. Hmm. Well, you're crushing it. How do you do all this at once? I have a great team, actually. We have a great team. We've been heavily investing in building a great team. And it's always about people. And I'm lucky that people I've been surrounded with, but they're as passionate as I am and they're talented and they do help a lot. There's a strong team feeling, so we are all involved.

We're all interested in bringing our products to the most market, to as many markets as there is. When I see that there's new markets opening on trading platforms, like there's new currencies and i see that there's action happening in africa or in latin america it just gets me uh it's just you know it gives you a lot of power to to to do that because i actually we know from our experience specifically with our trading platform but also with lending platform that in emerging markets which uh which we're building for our existing suite of of products are mostly focused to emerging markets of course we've been used in traditional markets as well

and actually heavily used in traditional market but there's also a lot of users in developing countries in emerging markets and when i see that people are actually using this to avoid as you mentioned hyperinflation or you know government restrictions or not being confiscated your money not being confiscated by the government or just to flee out of the country and to get your assets together with you because there's a like banks are controlled by local governments this is what we're doing where we're doing this in order to bring bitcoin to as many parts of the world as there is you know because there's a lot of there's a lot of uh there's a lot of markets out there there's a lot of countries out there uh who doesn't have that infrastructure that

that we have you know you have on or i have opportunities like that and as much and bitcoin is as you mentioned is it's uh it's a beam of light right and for many people we have use cases when people actually use our platform in order to you know run away from the country and help them survive and that's that's that's what amazes me and that's what's you know keep us going and and building and doing this stuff not like high valuations or you know raising another round from investors or you know buying myself some some cool stuff i love buying myself a cool stuff i'm still far from that uh from from buying an actual cool stuff but anyway uh you know we we are and we are passionate in our team we are passionate about that and most of us are coming

from emerging markets you know most of us are coming with uh with the history we do understand what is it what is it living under hyperinflation conditions or we understand how is it when you've been like you know stacking money all your life and then suddenly you wake up and government tells like hey your money is worth uh like 10 times lower amount of uh new money that we have decided to to launch from this day and you suddenly you are broke you know we've been experienced that we've lived through that and we understand what is it you know so yeah it's it's it's kind of team and people and and uh support of of the community that's what you know that what's important for us yeah i'm sure it's easy to go to work every day when you're doing stuff like that

it's fulfilling isn't it yeah it is it is you have you have an actual goal you know you're not the slave of of you know money you're not doing this for the money of course you want to you know you want to live well but you're also doing this to help people and that's that's that's the best driver out there honestly yeah now matt and i actually we pulled up the uh the paxful trading volume yesterday we're just curious to see what's going on like the sub-saharan africa activity is blowing up right now um yeah paxful is they're amazing uh they have opened certain regions like africa and uh but same way as i as i was always saying like uh local bitcoins yeah they're custodial they do kyc blah blah blah but they they have single-handedly built a peer-to-peer

bitcoin trading market you know the the market was non-existing at the point when they have started and they have basically created the peer-to-peer trading market uh same way with paxful yes they're custodial they do kyc uh like we're we're we're the opposite side but again they are opening new markets and uh this is important for all market market members market participants you know because there there's always should be uh someone who are exploring new opportunities new regions and then the rest of us are coming in yeah it takes it takes effort from all of us around the that's the other thing it's crazy that was the uh the beauty of being in Riga and meeting that was one of the most mind-bending experiences for me this year um because when I went in 2018 the

podcast was only a year old and it's not it wasn't as big as it is now and it was extremely humbling meeting freaks from Serbia from Poland from Finland uh and it really drove home to me at that there are people all over the world who get the opportunity that Bitcoin provides individuals the world over and they've dedicated their lives to making sure that it gets into the hands of as many people as possible. Yeah, it's an amazing thing about Bitcoin. You know, we all, not many people or enemies of Bitcoin

understand that we all are doing something for Bitcoin in the most decentralized fashion you know there's there's like simultaneously like right now right now at this moment when we speak with you together there are like thousands ten thousands of people globally in the world developing discussing transferring trading borrowing whatever they're doing you know orange pilling other people and this is expanding and we we didn't agree on something like hey we need to promote bitcoin no we didn't agree on that we're just doing this separately from each other and uh but it's a like you know it's a global effort and with with that decentralization in mind with with being like our efforts decentralized globally this will this will

bring us to success honestly this this will amaze me from from bitcoin people itself as well yeah we're gonna win of course we're gonna win well i know uh it's friday evening where you are i don't want to to hold you up too much on on your friday night but that's been an incredible conversation again really excited um to see you grow uh the suite of products that you have at hodl hodl and then building debify and aiming for much larger goals to to bring bitcoin to the world so thanks for doing what you do keep crushing it um and i can't wait to record at some point in the future to learn about the joker card that you're that you mentioned earlier thank you i'm gonna uh most probably we're going to

disclose the joker card during the next baltic honey badger okay we got a little bit of time take one year you got a little bit of time yeah maybe a bit earlier we'll see soon tm soon tm thank you very much marty thank you all the listeners thank you for having me it's like third time already uh and it's always a pleasure i really enjoy that i'm really the pleasure's all mine where uh i always i always remember uh hanging with hanging out with you in napa valley on the winery you went off but we've been drunk as hell but anyway it was it was a nice experience yeah it's it's it's hard to have a bad experience when you're drinking wine in napa yeah yeah it's true it's true i would love to come back and i will definitely come back

where um where can the freaks learn more about debify if they're interested uh well website obviously debify.com and we also have a twitter uh twitter account so you can you can subscribe for that it's debify.com so without uh without actual uh without dot so just one word debify.com unfortunately the tag debify wasn't available so debify.com and there are all social networks available out there so you can learn there check my presentations from youtube listen to the podcast and yeah these are the main sources at the moment hell yeah go check it out freaks and you go enjoy your friday night sir thank you very much marty thank you cheers it was a pleasure it's always a pleasure peace and love freaks