Bitcoin lending only runs in one direction
Bitcoin lending serves people who already own BTC and want dollars.
Liquidation punishes conviction
On-chain lenders have force-sold 19,500+ BTC in crashes since 2021. Ledn liquidated ~1,300 loans in early 2026 alone.
Borrowing BTC is a bet against it
Borrow BTC and it doubles, and you owe twice as much. So only 3.9% of the BTC in DeFi is ever borrowed.
Lend like a mortgage, not a margin account
Two observations shaped the product.
The people accumulating Bitcoin are small, and they buy hardest in crashes
56.3M addresses hold under 1 BTC. The 0.1–1 BTC tier grew 2.9× faster in the 2021–22 bear market than in the bull run that followed.
Public companies already stack Bitcoin with debt that can’t force a sale
More than 70 do, from Strategy to Metaplanet. Strategy built 800,000+ BTC partly on convertible notes, and rode out the 2021–22 crash without a margin call.
Six product decisions, and what they cost
Dropping the price trigger meant rebuilding three things: where the lender’s protection comes from, how payments work, and how a loan gets created.
- Decision01
Replace price-based liquidation with a PUT option per loan
Every loan buys a Deribit PUT on its full position, struck near 73% of the starting price for the loan’s term. Instead of lenders absorbing crash losses, a $30B+ options market carries the risk.
What it costA premium of 1–6% of the BTC price, paid upfront. Rolling the PUT down recovers ~56% and escrowed BTC earns yield; savings return as promotional incentives.
- Decision02
Liquidate only on a missed payment, and only as much as needed
A falling price never closes a loan; a missed payment does. Even then, a micro-liquidation sells only enough BTC for that installment plus a fee. The loan unwinds only if the rest can’t cover the debt.
What it costFalling behind still costs BTC, one installment and one fee at a time: slower and smaller than a margin call, but not free.
- Decision03
Fixed payments for the borrower, variable rates underneath
The rate floats with pool utilisation between a 7% floor and a 15% ceiling, where lender money pours in. The installment is set at the ceiling and capped at what’s owed, so nobody overpays.
What it costBorrowers budget for 15%, not the live rate. In return the bill never changes, while DeFi rates swung from 1.85% to 24.6% in 18 months.
- Decision04
Create the whole loan in one atomic transaction with a flash loan
One transaction flash-borrows from Aave, buys the BTC, locks it as collateral, borrows USDC from our pool and repays Aave, in under 5 seconds. Without it, every loan would need twice the liquidity.
- Decision05
Keep idle lender money earning, and price loans fairly
Unlent USDC earns the base rate in Aave V3. Rates use virtual utilisation, borrowed ÷ (pool + Aave position), so parked money doesn’t inflate them. Past an 80% kink, rates climb steeply to pull in lenders.
- Decision06
Non-custodial and permissionless by design
Users only touch smart contracts; no Bitmor entity holds funds. Config changes wait behind a 1-day timelock guardians can cancel, multisigs need 2-of-3 or 3-of-5 signatures, and US persons are blocked at three layers.
Where the six decisions land against the alternatives
| Bitmor | MortgageFi | Looping on Aave or Morpho | Ledn B2X | |
|---|---|---|---|---|
| Repayment | Fixed monthly | Fixed monthly | Variable rate | Anytime during term |
| Liquidation | Only on missed payments, in part | None on price; whole position on default | Around a 15% price drop | Margin calls from about a 30% drop |
| Default risk in a crash | Hedged with options | Absorbed by lenders | Borrower gets liquidated | Borrower gets liquidated |
| Effective leverage | 3.3× | Up to 50× | 2.5–3.7× | 2× |
| Custody | Non-custodial | Non-custodial | Non-custodial | Custodial |
| Access | Permissionless | Permissionless | Permissionless | KYC required |
| At the end | You own the BTC | You own the BTC | Price exposure only | You own the BTC |
MortgageFi and Ledn terms are from their own sites as of November 2026. Looping figures are from our own analysis.
Proving it against every historical crash
Lenders won’t fund a pool that can’t sell on price without proof. I led the backtest; our quant co-founder built the PUT pricing and roll-down engine it runs on.
How much protection each loan had against what the lender was owed. Below 1.0×, the lender loses money.
For a borrower: at $71K spot, buying through Bitmor cost ~7.1% over spot all-in, with interest, hedge and fees, for the whole position on day one.
Go-to-market: fill both sides, in order
Borrowers and lenders have to arrive together, so I planned each side separately.
Borrowers
Four borrowers, mapped by capacity and urgency
“I’ll never own a full coin”
Younger and earlier in their career. 0.01 to 0.1 BTC, from $210 down and about $166 a month, framed as a purchase.
“I’m accumulating too slowly”
Already stacking and wants a whole coin sooner. 1 BTC over 12 months: about $21,000 down, then roughly $4,300 a month.
Low capacity, low urgency
Small budgets and no rush to buy. I chose not to target this segment and spent nothing acquiring it.
“Show me the math”
Patient DCA buyers who want proof before they borrow. Reached through comparison content and the loan-vs-DCA backtest.
Start small, graduate up
Year one leads with small loans, interest-free for the first 358 borrowers (~$20K), to build a repayment record. Repaid borrowers graduate up, and the 1 BTC tier opens once that record exists.
A channel for every segment
$120K for year one: $93K on channels, ~$20K for the subsidy and $7K in reserve, aiming at 650 loans from ~2M impressions a month.
| Channel | Spend | Accumulators | First-coiners | Evidence-seekers |
|---|---|---|---|---|
SEO and AI searchComparison pages and AI answersAccumulatorsFirst-coinersEvidence-seekers | $28K | |||
On-chain wallet adsWallets holding 0.05+ BTCAccumulatorsFirst-coiners | $21K | |||
Social adsFans of River, Swan and StrikeAccumulatorsFirst-coiners | $21K | |||
Paid KOLsTracked links, then a fee shareAccumulatorsFirst-coiners | $16K | |||
PodcastsBitcoin and macro showsAccumulatorsEvidence-seekers | $5K | |||
Educational tools“How long until 1 BTC?”First-coinersEvidence-seekers | $2K | |||
RedditOrganic backtest threadsAccumulatorsFirst-coiners | $0 |
Testing it before launch
Loans needed a mainnet launch, so we tested the channels on what was already live.
- Jun 2025 – Mar 2026Worked
Reddit
Data posts in r/Bitcoin and r/CryptoCurrency built on our loan-vs-DCA backtests, plus daily replies.
250K–500Kimpressions a postAn early pitch got roasted, so we led with data. Cold DMs read as scams.
- Oct 2025Worked
A free DCA app
A public-good DCA app on Base, live before loans, to reach stackers early.
5,000+transactions before loans existedIts users were our first audience for loans.
- From Nov 2025Worked
The Base App
Listed under “Trading must-haves” for months, and trended #3 in Finance.
~20%of visiting users converted - Nov 2025Wrong audience
Creator campaigns
A Base creator contest, then a podcast and clipping campaign with Scribble.
<50waitlist sign-ups from $1,000 and ~300K impressions on XWe needed channels that reach tokenized-BTC holders.
- Feb – Mar 2026Best value
On-chain ads
Spindl ads in Coinbase Wallet, Bitget Wallet, LayerHub and Jumper, aimed at Dune-segmented wallets.
200+waitlist sign-ups from $200Bid high on a narrow set of prime-target wallets, and low on broad audiences.
Reach was easy; the right audience wasn’t. Those sign-ups, with our DCA users, were to be the first interest-free borrowers.
Lenders
Seed the pool first, earn trust, then open up
Our money first
$100K of our own capital funds the first loans, so lenders judge a real track record.
Go where the money is
Of 69,175 lender wallets, $100K+ wallets held 96% of capital, at a median rate below T-bills.
Rewards that switch off
Treasury rewards pay only above 90% utilisation, then stop. Year-one cost: $21K–146K.
We were in talks with two Base-ecosystem partners, one for each side of the market.
AARC
AARC’s BTCY vault, built on Sygnum Bank’s BTC Alpha Fund, would earn ~5% on the collateral, nearly covering the interest.
Hydrex
Hydrex would co-fund liquidity campaigns and spread Bitmor across Base, giving lenders a channel beyond our own outreach.
- 1
First 1,000 users
Convert our own DCA users, then target on-chain tokenized-BTC holders and CeFi borrowers such as Ledn’s.
- 2
Scale
Integrate with centralised exchanges and with wallets such as Coinbase and MetaMask, to reach users beyond our app.
- 3
Institutions
Partner with banks and custodians, and offer the financing rails to them as a white-label product.
What I owned
Our CTO led the contracts and our quant built the options engine. I owned everything else.
- 01
Product
User interviews and buyer personasPRDs for loans, repayments and the BTC vaultBrand identity with our designer: the process and the brand bibleHotjar reviews of where testers got stuck
- 02
Protocol
Specs for the lending pool, BTC vault and options hedgeRules for repayments and missed paymentsSecurity review by FailSafe: the post and case studyA Coinbase-sponsored audit, lined up for mainnet
- 03
Economics
Financial model and fee scheduleInvestor data roomA 1.07% take rate on loans, ~4× Aave’sThe 1,464-loan backtest
- 04
Go-to-market
Borrower segments and offersInterest-free loans for the first 358 borrowersLender rewards that kick in when the pool runs lowPre-launch tests on Reddit, creators and on-chain ads
- 05
Partnerships
- 06
Company
Hiring the founding team and advisorsSetting up the companyPitching to funds, accelerators and angel investors
How it ended
We stopped building in June 2026. We couldn’t raise the capital a lending protocol needs before its first loan.
It also needed an entity to run the options desk, and money for a second audit if the sponsored one found a critical bug. The grants and Base Batches results proved the idea was worth building; they couldn’t fund a balance sheet.
What I’d do differently
01Line up the market timing with the fundraise
Our pitch leaned on downturns, when small holders accumulate fastest. That’s also when investors hold back. The idea was strongest when it was hardest to fund.
Treat the funding climate as a product constraint from day one, with a cheaper version ready to launch if capital isn’t there.
02Cut scope to what the first loan needs
We spent 9 weeks on the BTC yield vault. It improves the borrower’s economics, but nobody needs it for a first loan.
Launch smaller: a capped pool on the $100K seed, a single 0.1 BTC tier and the PUT hedge, then raise on real repayments, not a backtest.