General
What is Firefish?
Firefish is an open market for Bitcoin-backed loans where users can participate as Borrowers or Investors.
- Borrowers receive fiat or stablecoin loans and use Bitcoin to secure them.
- Investors earn interest on their investment by providing funds for such loans.
Why Firefish?
At Firefish, the users are in control. Different to centralised lenders, many of whom have recently collapsed, Firefish does not have access to Bitcoin collateral - it is never touched, traded or exchanged. Instead, it is securely locked in a smart contract built on top of the Bitcoin network, making the process secure for both Borrowers and Investors.
The marketplace model also facilitates price competition, enhancing price discovery and transparency for both parties involved.
Firefish also enables non-bitcoin native Investors to participate in the market and invest in Bitcoin-backed loans, without any need to process Bitcoin transactions, operate wallets or manipulate with cryptographic material. The sole responsibility of the investors is to facilitate fiat transfers to and from their bank account.
Finally, you don't have to worry about Firefish's solvency or reputation either - we only provide the technology for secure interaction between Borrower and Investor, and we never have access to users' funds or collateral.
Is Firefish open-source?
The complete Firefish protocol documentation and source code are available at https://protocol.firefish.io/. The Firefish source code allows you to verify the build and check it against the website's WASM for transparency and security.
Who provides loans at Firefish?
Firefish is a peer-to-peer (P2P) platform where loans are provided on bilateral basis between our users - Borrowers, holders of Bitcoin and Investors, holders of banking money.
Firefish offers technology for secure interaction, escrow and settlement.
What amount of Bitcoin do I need for a loan?
In general, the ratio between your Bitcoin collateral and the amount due (amount + interest) of your loan is 2x.
For example, if you wish to borrow EUR 1000, for 1 year at 6% (amount due ⇒ 1000 + 6% = EUR 1060), you would need to lock Bitcoin collateral worth EUR 2120.
On top of that, you should consider the current blockchain fees and Firefish service fee of 1.5% (p.a.) of the notional amount that will be deducted when transferring Bitcoin.
How does the whole process work?
The process can be summarized as follows:
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Borrowers submit their loan requests, including details such as the loan amount and currency, their preferred interest rate (in case of Standard Loans), and loan tenor. Once the Borrower submit their request it is either immediately matched with an Investor, or listed in the Loan Marketplace.
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For Investors, there are two methods of interacting with the platform:
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Loan Marketplace - displays all available deals that haven't been matched with a particular Investor. Investors can select any of the available deals and accept the opportunity.
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Watchdog - An email notification service that enables Investors to customize their preferences for currencies, minimum and maximum loan amounts, interest rates, and loan periods.
When a Watchdog is created and a Borrower submits a loan request that matches an Investor's preferences, an email notification is sent to the Investor, who can then accept the deal.
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Investor accepts the deal opportunity and loan agreement and the respective Borrower receives a notification to start their part of the process.
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Borrower accepts the loan agreement and proceed to the Bitcoin collateral setup process.
There they confirm their platform password, specify their Bitcoin return address, to which the collateral is sent after a successful repayment of the loan, and proceed to the Bitcoin transaction. Once Bitcoin is sent and confirmed on the network, the Borrower finalizes the process with a final confirmation.
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Investor receives a notification about the collateral being successfully locked and moves to the funds transfer part of the process. Once the money is sent to the Borrower's bank account (for example from a banking application), the Investor confirms the transfer.
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Borrower finally confirms once the funds arrive in their bank account, and the deal is live.
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At maturity, the Borrower receives a notification to repay their loan via a bank transfer and confirm the repayment on the platform.
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Investor receives funds to their bank account and confirm the repayment. The deal is closed.
In case of Borrower's default or significant decline in the value of the Bitcoin collateral, a liquidation process starts. (Please see further for more details).
How do you match borrowers with investors?
There are two ways for matching Borrowers with Investors:
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Watchdog - Firefish aggregates all borrow requests and investment Watchdogs and matches Borrowers and Investors based on their selected currency, amount and tenor.
If there are no available investment offers for a deal, Firefish lists the deal in Loan Marketplace.
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Marketplace - if there are no opportunities for an instant match, a loan request is listed in the Loan Marketplace for 30 days. Investors can proactively select any of the listed deals.
What is the difference between Standard and Instant loans?
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Standard Loan: You can choose all the loan parameters, including your preferred interest rate. Your loan request is then posted in the marketplace and sent to relevant investors for matching.
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Instant Loan: Borrow cash immediately at a fixed interest rate, without the need to wait for an investor match. Once you submit the request, you will proceed to lock your Bitcoin, and the funds will be sent to your bank account instantly.
Where is Firefish available at this moment?
Please refer to the following links to see the list of countries eligible for fiat transactions and restricted countries.
Which countries are eligible for fiat transactions on the Firefish platform?
Please refer to the following links to see the list of countries eligible for fiat transactions and restricted countries.
Do you accept collateral other than Bitcoin?
Firefish is a Bitcoin-native platform. We have no plans to expand our coverage and are focused solely on providing the best service to bitcoiners.
Do I need to verify my identity via a KYC process?
In order to provide a complete borrowing and investing experience involving banking money, Firefish is required to comply with standard KYC/AML regulations.
On top of that, Firefish aims to ensure security and prevention of fraudulent activities for both Borrowers and Investors in the P2P relationship, while safeguarding the integrity of the platform's transactions and operations.
The identity verification through a KYC process is required to ensure regulatory compliance and secure financial transactions. Our verification partner is Idenfy.
Can I register on the platform as a company or institution instead of as a private individual?
Please contact us at hello@firefish.io if you would like to register on the platform as a company or institution.