Lava raises $200M and launches world's first Bitcoin line of credit with no fixed payments and 5% fixed rate

we're running late. Give us the news. What's the latest in Lava World? Can you guys hear me? Yeah, we can hear you loud and clear. So we basically announced Monday that we raised 200 million venture and debt.

Um, we brought on some new investors like Anthony Pompy, uh, Eric Jackson from Open Door, who you guys must have on before as well. And we also announced what I think is the most important product I think in Bitcoin's history so far other than Bitcoin, which is the Bitcoin, it's the world's first Bitcoin line of credit.

So, Lava has been doing loans for years now, but all our loan previously was structured like a Bitcoin mortgage. So you had to make fixed payments. There was a fixed term to it. But now and that was very similar to the other loan products in the market too.

But with the Bitcoin line of credit, we are offering the most flexible loan product in the entire market. So basically you can borrow, you can keep it open for as long as you want, two years, three years, really forever. U you don't have any fixed payment schedule. So there's no monthly payments involved.

you can pay down your loan whenever you want your line of credit and you can borrow back against it at any time and we're offering the lowest interest rates fixed interest rates um at 5% across the board. So really what we realized was that Bitcoiners are a very unique audience.

They all have very distinct cash flow needs, income, you know, a lot of Bitcoiners are retired on their Bitcoin. So having a product like building a product with fixed terms, fixed payments and applying it to all the bitcoiners was just not something uh that was working and it's not something that they wanted.

Whereas this product it offers the most amount of flexibility. So no matter what your cash flow needs are, no matter what your income is, you can use this Bitcoin line of credit uh use it to use your Bitcoin and manage your Bitcoin wealth uh with the flexibility you need and at the lowest rates across the world.

Um yeah. Uh as I we we've been on the show multiple times. We've talked about the business. Um I'm interested in to understand like why is fundraising happening in a traditional sense instead of sort of all happening on chain one bitcoin at a time.

Uh like why why is there like a package trunch of of investment happening? Because we actually have our own uh yield product. We actually and we announced that through you guys a couple of months ago, weeks ago.

Um, so we do have depositors that are coming on chain with stable coins around the world that are depositing their uh, you know, their cash, their stable coins, earning yield, funding Bitcoin back loans, but those depositors can deposit and withdraw at any time, right? Permanent investment.

Yeah, this we're offering fixed. So to make sure that we're never in a asset liability mismatch, we need to make sure that we are raising the credit lines available to kind of refinance loans and these credit lines are at fixed uh rates, fixed terms, right? So we always are kind of matching liquidity in a way.

What we are uh we're just providing like onchain banking in a way right so we need to have you know depositors and I think that's the real value of stable coins is that they're global so you can kind of give functionality and savings to people with stable coins.

Uh obviously Bitcoin is a savings asset more of a long-term savings asset for some of these this audience that is using this product. Uh but then we need the credit lines as well to make sure there's never an asset liability mismatch. Does that make sense? Yeah, totally.

How how what's what's the strategy around navigating lava through such a rocky uh environment? Bitcoin's down as of this moment, 16% in the past month. There's been a lot of volatility and other uh even more volatility in other uh tokens.

But um it feels like that, you know, you guys were started like a year and a half ago, two years ago. What was the timing? Yeah. Uh around two or a little more than two years ago. So we've been building this for a while.

But yeah, so building it building it on an up on an upswing uh and it managing through you know corrections is going to be what makes Lava uh you know a a super super obviously that the solution is meant to be trustless but brands still matter. Uh well there's definitely trust involved.

We we totally like like want to lean into that right. So one thing is on the uh bitcoin yeah bitcoin price hasn't been doing well but also lava is bitcoin only so the only collateral asset we accept is bitcoin even recently there's been some uh protocols that were accepting other crypto assets like other digital assets.

There's one I don't know if it's fully public yet that's actually recently blown up because the the altcoin debt um the altcoins have been like dropping pretty significantly in price.

So if you're lending against it uh and will drop way too quickly uh you basically have taken on bad debt and then the depositors are not no longer whole. Actually a few weeks ago I'm sure you guys discussed this but there was a big auto kind of delever a lot of coins actually instantly dropped 80%.

Um Bitcoin was still fine in that world. So on one thing that helps us to manage liquidity and safety for our users is we're Bitcoin only. So as a Bitcoin, they know that they're not taking on risk of other altcoins when they're borrowing with Lava.

The other thing is we always encourage people to add more collateral to their loan. So the average LTV on a Lava loan is 30%. So it is, you know, it is pretty safe. So Bitcoin would have to drop effectively like 70% for majority of users to get liquidated.

And almost all of our users actually have ex extra bitcoin that is available to them to also as collateral to kind of make sure that they are safe. There have been some like 50% draw downs but a 70% draw down in bitcoin. I feel like that hasn't happened in long like years and years and years. Yes.

So it makes a ton of sense. It is it is definitely a risk um when you're borrowing against your bitcoin. But the other kind of counter to that is anyone holding bitcoin right now is also predicting that the price is going to go up, right?

Because otherwise, if you do believe Bitcoin is also going to drop 70%, it's actually probably not the right idea for you to even hold Bitcoin. Don't hold it. It's actually probably the right idea for you to hold cash and then kind of re into Bitcoin.

So, you know, we are not like providing this financial advice to people, but most of our users are still believing that Bitcoin's going to do well. Otherwise, they wish Bitcoin, they would just hold cash, right? They're diamond handsing. Well, thank you so much for coming on the show.

Sorry for keeping you waiting, but congratulations to the progress. Uh we will talk to you soon. have a good rest of your day to catch up. Uh before our next guest hops on, let me tell you about Finn.

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Uh our next guest is Mina from Sandbar coming in the studio from the Restream [music] waiting room. Mina, how are you doing? Good. Welcome. How are you? Thanks for having me. It's great to have you. Thanks so much for hopping on the show. Uh give us an introduction. Uh explain