Frequently Asked Questions
Firefish is a digital platform where members can participate as borrowers or investors.
Borrowers receive cash loans and use bitcoin to secure them.
Investors earn passive income by providing funds for such loans.
At Firefish, the members 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.
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 members' funds.
Firefish is a peer to peer platform where loans are provided on bilateral basis between our members - Borrowers, holders of bitcoin and Investors, holders of cash.
Firefish offers technology for secure interaction, escrow and settlement.
Our platform is currently in an Early Access mode. We invite all fellow bitcoiners and self sovereign investors to take part.
In the current Early Access mode, Firefish doesn’t charge members any origination or other fees.
Firefish is a bitcoin-native platform. We have no plans to expand our crypto coverage and are focused solely on providing the best service to bitcoiners.
Firefish Loans - Borrowing
Long-term bitcoin holders may run into situations where they need money for an investment opportunity or personal consumption.
Likewise, professionals with bitcoin on their balance sheets might want to gain additional leverage or exposure. Instead of selling their bitcoin holdings, they can consider a Firefish loan, while keeping their bitcoin exposure and enjoy future capital appreciation.
Additionally, by not selling their bitcoin they would avoid capital gain tax implications.
We currently support USD, EUR and CZK denominated loans.
Due to operational reasons, the minimal loan amount is 1000 USD or equivalent
Interest rates on Firefish are not set by us, instead they are driven by supply and demand from the members. Check our platform or contact us for the actual rates.
In order for individual loans to be properly secured, the value of the collateral must always exceed the value of the loan. In the event of a large change in the bitcoin exchange rate, collateral may need to be added to prevent liquidation.
Members can actively track the status of their specific loan within the platform using CHI or LTV indicators.
Firefish Loans - Investing
Along with borrowing, Firefish allows its members to invest money in secured Firefish loans in a very direct and easy way. No trading, cryptography or blockchain skills are required.
Once the collateral securing your investment is locked, you will be asked to transfer the funds directly to the borrower's bank account. You will receive your investment and accrued interest on the maturity date.
No. Full stop. Investing with Firefish is easy, you do not need to interact with bitcoin or blockchain, all complexities are handled by Firefish.
Interest rates on Firefish are not set by us, instead they are driven by supply and demand from the members. Check our Platform or contact us for the actual rates.
No. Because the value of the locked bitcoin is always higher than the loan itself, the possibility of default and you losing your investment is completely removed.
If the borrower doesn’t pay back, bitcoin collateral is liquidated and you receive your funds back. The return of your investment is guaranteed.
Your investment and interest will be returned to your bank account on the maturity date of the loan.
In the event of a borrower default, Firefish will automatically liquidate the bitcoin collateral and return the investor's entire investment and interest earned.
Firefish protocol is a set of rules designed to facilitate a loan contract between borrower and investor, and use bitcoin collateral to secure it. The bitcoin network is used to enforce such rules.
Check out more details about the Firefish protocol and its security model on our Document Hub.
Unlike centralised custodial lenders we do not rely on trust when it comes to security. Firefish protocol is secure by design.
We invite you to learn more about the protocol, its assumptions and potential risks in our Document Hub.
To secure a Firefish loan, bitcoin collateral is locked through a 3-of-3 multi-signature contract which ensures safety and prevents anyone from accessing it. The collateral only moves when a set of predefined criteria, such as repayment are met.
In general, Oracles are systems that connect data from the outside world (off-chain) with the blockchain world (on-chain).
Firefish protocol requires two kinds of off-chain data: the current bitcoin exchange rate (e.g in case of liquidation); and confirmation of fiat payment (e.g. in case of repayment). Oracle services are in the current Firefish release provided by our partner Tedsig https://www.tedsig.com/
With Firefish, investors can appoint a third-party to act on their behalf in case of a liquidation or loan default. This allows them not to worry about handling cryptographic material, such as private keys, or about interacting with exchanges.
Liquidator is legally empowered to act on behalf of the investor and sells bitcoin collateral on the open market for cash. Proceeds are then used to fully repay the investment.
LTV, or Loan-to-Value ratio is a financial term used to express the ratio of a loan to the value of collateral. The initial LTV (e.g., 50%) is used to define how many bitcoins need to be locked in the escrow contract in order to obtain a specific loan amount. If the LTV reaches a predefined liquidation level (e.g. 95%) during the life of the loan, the collateral is automatically liquidated to repay the loan and return the proceeds to the investor.
CHI, or Collateral Health Indicator is used on Firefish platform to understand in simple terms if there is sufficient collateral to secure a loan. The higher the CHI, the better. A CHI of 100% represents full health, or sufficient collateral as recommended by Firefish. On the other hand, if the CHI starts to approach 0, you should consider adding additional collateral to avoid liquidation.
Liquidation is the process that occurs when the value of the borrower's collateral does not sufficiently cover the value of the loan due to a decline in the price of bitcoin. In this case, a portion of the collateral is automatically sold and the proceeds are then used to pay off the loan.
If the value of your bitcoin collateral falls below a level considered safe, we will kindly remind you (by email, text message or friendly phone call) to replenish your collateral.
If you choose to top-up your bitcoin collateral, Firefish will create an additional escrow contract that will be linked to the existing loan. Members can initiate a collateral top-up via their Firefish account.