The Good Tech Companies - How Altitude Finance Turned Bitcoin Into a $26 Million Lending Infrastructure

Episode Date: December 17, 2025

This story was originally published on HackerNoon at: https://hackernoon.com/how-altitude-finance-turned-bitcoin-into-a-$26-million-lending-infrastructure. Altitude Finance CEO explains how Bitcoin-collateralized lending achieves 2.63% rates and $26M TVL while surviving 18 months without user fund losses. Check more stories related to web3 at: https://hackernoon.com/c/web3. You can also check exclusive content about #web3, #defi, #altitude-finance, #cryptocurrency, #good-company, #lending, #startup, #crypto-lending, and more. This story was written by: @ishanpandey. Learn more about this writer by checking @ishanpandey's about page, and for more stories, please visit hackernoon.com. Altitude Finance CEO explains how Bitcoin-collateralized lending achieves 2.63% rates and $26M TVL while surviving 18 months without user fund losses.

This audio is presented by Hacker Noon, where anyone can learn anything about any technology. How Altitude Finance turned Bitcoin into a $26 million lending infrastructure by Ashan Pondi. Greater than Defy Lending has moved beyond experimental protocols into infrastructure that greater than people use for real financial needs. Altitude Finance represents this shift, operating as a Bitcoin collateralized lending platform where users lock BTC to access liquidity without selling their holdings. With over $26 million in total value locked in average interest rates around 2. 63% the platform demonstrates how automated lending markets can compete with traditional financial products on cost and accessibility. In this exclusive interview, Tobias Van Amstall, the co-founder and CEO at Altitude,

discusses how collateral management, risk parameters, and market design determine whether defy a lending platforms remain sustainable beyond favorable market conditions. Ashan Pondy. Hi Tobias. Welcome to our Behind the Startup series. Can you start by explaining your background and what specific problem in traditional lending led you to build Altitude Finance, Tobias van Amstall? It really started because we are active defy users ourselves. We're long-term holders of Ed and BTC, so we don't want to sell those assets. When I needed liquidity, I would just borrow. But then once you've deposited your funds into a lending protocol and you borrowed what you needed, you can still borrow a lot more. To increase capital efficiency, you borrow more and

deploy that into yield farming. But that means a relatively high loan to value, which has the risk of liquidation. If the value of your collateral drops, the lending protocol can just sell your asset. So it was a trade-off between sleeping well at night and capital efficiency. We built altitude to remove that dilemma. So with altitude, your loan is capital-efficient, and you can sleep well at night. We achieve that by automatically borrowing at a high but safe loan to value and deploying those funds into yield farming. And now we have users that borrow for real-world purchases like a car, a new phone or home renovations. Their loan has a low loan to value, so Altitude generates yield for them, turning those loans into self-repaying loans. Ashand Pondi, Altitude uses

Bitcoin as collateral for loans. What makes BTC specifically suitable as collateral compared to other crypto assets, and how do you manage the volatility risk that comes with using such a volatile asset asked backing for stable loans? Tobias Van Amstel. First of all, we think BTC and Ed will keep appreciating in value, not financial advice. They work well as collateral because these two assets are the most widely held, most liquid and most battle-tested digital assets. Their deep market depth makes it highly reliable for collateralization at scale. Users also prefer borrowing against BTC, ETH instead of selling them, because ITALOs them to keep benefiting from the value increase and free up liquidity without having to pay tax. You are right that these assets are volatile,

so the users that want to sleep well at night, they borrow at a low loan to value. Then the vault automatically increases the loan to value to a high but safe number. We have spent a lot of time, energy, and attention to make sure the vaults rebalance in time. Our protocol has been live for over 18 months now and has seen multiple big price drops and chain congestions. During each of those price drops, the protocol performed well, and we are proud to say that we haven't lost a single cent offuser funds. Ashan Pondi, you've mentioned that altitude achieves average interest rates around 2.63%. How does your platform's rate determination mechanism work, and what factors allow defy protocols to offer rates that appear competitive with or below traditional lending markets?

Tobias van Amstall. It is important to do. to note that our interest rates are not fixed. They are variable. This is because borrowing costs in Defi depend on several factors, including the user's loan to value and the interest rates across the rest of Defi. What altitude does is optimize these in real time. The platform borrows from established protocols like Ave and Morpho, continuously scanning for the lowest borrowing rate. On top of aggregation, we activate unused borrow capacity, and we deploy those borrowed funds into yield farming. This combination of intelligent routing and activated borrow capacity is what allows users to access average net rates that are highly competitive with and often

significantly better than traditional lending venues. Our happiest users borrow below 20% loan to value. Usually borrowing below 20% loan to value results in a self-repaying loan. This is because we earn more fourth user with yield farming than they accrue in interest on their loan. Ashon Pondy, the platform has accumulated over $26 million in TVL. Can you walk us through the risk management architecture that protects both lenders and borrowers when collateral values fluctuate? What happens during extreme market conditions like a 30 to 40% BTC price drop, Tobias Van Amstall? Our risk architecture is built around three core principles, user-owned collateral, automation, and conservative risk parameters. Because altitude is fully

non-custodial, users always control their assets, and the smart contracts enforce all rules transparently. That alone removes entire categories of counterparty risk. We designed altitude to be safe, automated, and user-controlled. Because we are non-custodial, you hold your own assets. This means you never have to worry about us mishandling your funds. When there's a big price drop, automations keep the vault safe. Funds are automatically withdrawn from the yield farm and used to reduce loan to value. During recent market crashes, our vaults remained healthy and were never at risk off liquidation. So real-world stress tests have proven that our safety measures work exactly as planned. Ashan Pondi regulatory frameworks for Defy Lending remain unclear in most

jurisdictions. How does altitude navigate compliance considerations, particularly around securities laws, lending licenses, and consumer protection requirements that traditional lenders must follow, Tobias van Amstall. Regulation is meant to protect users. Traditional lender state control of your funds, so it's important that those lenders are regulated, otherwise they might abuse those user funds like we've seen in the past. Altitude is built on a non-custodial architecture, which means users always remain in control of their assets and all core functions are executed by transparent, deterministic smart contracts. Our aim is to always operate within the law, and on top of that offer clarity, transparency and responsible disclosures to our users.

So we keep a close eye on regulatory developments worldwide, Ashan Pondi. Looking at the broader defy a lending landscape, several protocol shave faced issues with bad debt, liquidity crises, and unsustainable yield models. What lessons from previous defy lending failures informed how you designed altitude's economic model and risk parameters, Tobias van Anstall. The defy a lending space has gone through several painful episodes marked by bad debt, liquidity shortfalls and yield models that simply could not withstand real market conditions. These failures provided clear lessons that directly shaped how we designed Altitudes economic

model and risk framework. First, sustainable yield must come from genuine economic activity. We do neutrally on inflated token incentives or circular mechanisms. Yield on Altitude IS generated from underlying lending markets and enhanced through idle capital activation, which improves net outcomes without introducing a additional systemic risk. Second, robust collateral management is essential. Our risk parameters, particularly around LTV, are intentionally conservative. The combination of automated health monitoring and user-owned collateral ensures that positions remain resilient even during significant

market volatility. Third, simplicity and automation outperform complexity. Many past failures arose from systems that required users to juggle multiple layers of leverage are managerisk manually. altitude enforces risk rules on chain, automates rate routing and keeps collateral productive without requiring constant oversight. By grounding the protocol in transparency, automation and real economic yield, we have built a model designed to remain stable across full market cycles, not just during favorable conditions. Ashan Pondi, where do you see Bitcoin collateralized lending evolving over the next few years? What developments in infrastructure, regulation, or market maturity would need to occur for defy lending to achieve the scale and stability necessary

to genuinely compete with traditional financial institutions, Tobias Van Amstel. Bitcoin collateralized lending is on a clear path from a niche defy use case to a core piece of global credit infrastructure. As the market matures, I expect BTC to function less as a purely speculative asset and more as high-quality collateral that long-term holders routinely borrow against for real-world needs. For defy lending to truly compete with traditional institutions on scale and stability, several things need to happen in parallel. On the infrastructure side, we need more seamless fiat on and off ramps, institutional grade custody options, robust oracle and risk frameworks and lower friction transaction layer so that the user experience

feels closer to a modern fintech app than a protocol dashboard. On the regulatory side, clearer differentiation between custodial intermediaries and non-custodial protocols will be key, along with well-defined rules for collateralized lending and investor protection that still allow user stow retain control over their assets. From Altitude's perspective, the next phase is all about making BTC-backed borrowing feel like a normal, everyday financial tool. Users are already using Altitude for things like renovations, land purchases, cars and meaningful personal expenses while keeping their Bitcoin exposure.

Over time, we see this expanding with integrated Fiat rails and potentially card-based access to borrowed liquidity, and, when the ecosystem is ready, the ability to borrow against a broader set of real-world assets is collateral. If we get the combination of sound regulation, mature infrastructure and user-centric design right, Bitcoin collateralized lending will not just CO exist with traditional finance, it will become a credible alternative for a large share of prime borrowers. Don't forget to like and share the story. This author is an independent contributor publishing via our business blogging program. Hacker Noon has reviewed the report for quality, but the claims here and belong to the author.

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