Debifi: Bitcoin-Backed Self-Custodial Loans Without Rehypothecation
Debifi is a platform enabling Bitcoin-backed loans without rehypothecation.
Your BTC collateral is secured by a multi-sig escrow, and you'll get a stablecoin or fiat loan.
How does Debifi work and what is the use case?
You Hold the Keys to Your Bitcoin Collateral!
Custodial lenders (BlockFi, Celsius, FTX etc.) blew up in 2022 because they were misappropriating customer funds.
But what if you could take out an over-collateralized Bitcoin-backed loan while holding the keys to your collateral all the time?
Debifi enables this by setting up a 3/4 multi-sig escrow loan contract.
The key holders in the contract are:
✅ You hold 1 key (in the Debifi app)
✅ The lender holds one key
✅ Debifi holds 1 key
✅ Another institution holds 1 key
Throughout the loan period you are in control of your funds because 3 out of 4 signatures are needed to spend funds in the contract.
Debifi does not have access to your funds!
Only in case of liquidation (BTC price drops so much that your collateral doesn't cover the loan anymore), the 4th institutional key holder can come in and participate in liquidating the loan.
Institutional Lenders Provide KYC'd Loans
To start using Debifi, you only need to provide an email.
After that you will get a self-custodial wallet.
Debifi itself doesn't KYC borrowers, but since most loans are offered by institutional lenders, those require KYC.
Loan amounts on Debifi generally start from about $5,000, and the rates hover between 10-20%.
The maximum loan period tends to be 12 months, but Debifi has stated that they plan to extend them to 24 months soon.
Rates will probably go lower when the adoption of the platform grows, and when more institutions onboard as lenders.
Currently, most capital in the Bitcoin lending markets like Debifi is Bitcoiner capital.
Why would a Bitcoiner lock stablecoins or fiat in a loan contract for a year if bitcoin will appreciate more than the loan interest during that year?
But if more tradfi institutions join, maybe they wouldn't demand such high interest rates for lost opportunity costs.
The Debifi Mobile App Doubles as a Wallet and a Signer
The loan offers can be seen on the Debifi website.
The Debifi mobile app works both as a wallet and a signer, but you need the website in order to engage in contracts.
Aggregator For Lenders and Borrowers
Debifi monetizes its service by taking a loan origination fee (1.5% of the Bitcoin collateral).
Debifi doesn't provide any loans itself.
It just acts an aggregator platform for lenders and borrowers.
Hardware Wallet Support Coming!
Debifi loans deal with relatively large bitcoin collaterals, so it would often be ideal to use hardware wallets in these instances.
Luckily, a Coldcard Q integration seems possible, and in the future likely other hardware wallets too.
Use cases
Start a business without selling your BTC in order to fund your venture
Speculate on the price of BTC by borrowing more stablecoins or fiat to buy more BTC
Avoid taxable events
For lenders: access Bitcoin-native capital as a fiat-world institution
What do you think about Debifi?
Have you used it?
What were your experiences?
Project Links
Additional Resources
Video tutorial by BTC Sessions @BTCsessions:
Podcast episode by Preston Pysh with Debifi founder Max Kei:
Presentation by Debifi founder Max Kei at Baltic Honeybadger 2024:
Debifi Is The Premier Noncustodial P2P Bitcoin-Backed Lending Platform For Institutions, Bitcoin Magazine article by Frank Corva, March 12, 2025