Change my mind!

Hello! You are correct, Unchained is not a bank. But companies that are not banks can nonetheless originate and service loans. Unchained has various licenses and partners that allow us to do so. But this is really the "how" not the "why" :)

Unchained has offered bitcoin-collateralized, USD loans since ~2017. I sense some hesitation or disapproval from you about such products. I don't know if I can change your mind -- would you be surprised to know that, as a co-founder at Unchained, even I haven't used our loan product? It's not because I think it's bad or unsafe -- rather the opposite, I think Unchained is one of the safest ways to obtain a bitcoin-collateralized USD loan! -- it's because the cost is higher than I've been comfortable with. Unchained raises USD from the capital markets which we then lend out to our borrowers. The cost of this capital is often quite high, which means our loans tend to have a high interest rate. Bitcoin's historical price appreciation is so significant that, despite this high rate, it often makes more fiscal sense to borrow from Unchained than to sell your BTC (which will also have tax consequences that borrowing will not). But it's also true that if you have good credit and income you can obtain an unsecured loan for a much lower rate. This is the reason I've not personally used this product.

But I would like to! The rate for our loans has generally decreased since we started lending back in 2017, and I hope it gets even lower in the future as the capital markets come to understand how safe our model is. At some point our lending product will be competitive with other, more traditional credit products, and you can bet I'll become a borrower at that time.

Two more comments -- First, I think there's a perception that people who borrow against their bitcoin are leveraging up, using the proceeds to buy even more bitcoin. This may be true in some cases but the vast majority of borrowers at Unchained use the proceeds to purchase real estate (often a first home) or to make a business investment (often in a bitcoin business!). Second, the reason I believe Unchained's loan product is superior to historical bitcoin-based credit providers such as BlockFi, Celsius, &c., is that we use collaborative custody. The borrower gets to hold one private key within a 2-of-3 multisig wallet that maintains the collateral. Unchained holds a second private key and an independent third party holds the third. This structure prevents rehypothecation of collateral and has proven resilient against volatility and other forms of risk going on 7 years now!

To close -- I may not have changed your mind, credit isn't right for everyone, but I hope I've educated you about how Unchained thinks about our credit products and tries to do right by our borrowers :)