In this episode, Stephan Livera interviews Jos Lazet from Blockrise, discussing the recent volatility in Bitcoin prices, the semi-custodial model of Blockrise, and the future of Bitcoin lending. They explore the implications of market movements, the importance of risk management in lending, and the evolving landscape of Bitcoin services. Joss shares insights on Blockrise’s offerings, including asset management and lending, and emphasizes the need for user-friendly solutions in the Bitcoin space.
Takeaways:
🔸Bitcoin’s volatility is expected to continue for several years.
🔸The semi-custodial model offers a balance between security and usability.
🔸Risk appetite is crucial when considering Bitcoin loans.
🔸Institutional adoption is necessary for Bitcoin’s growth.
🔸Blockrise aims to provide transparent and user-friendly services.
🔸The lending market is evolving with new standards and players.
🔸Understanding liquidation points is essential for borrowers.
🔸The European banking system is efficient for fiat transactions.
🔸Blockrise focuses on a hybrid custody solution for clients.
🔸The future of Bitcoin lending will involve more innovative financial products.
Timestamps:
(00:00) – Intro
(01:00) – Bitcoin’s recent price volatility & ETFs role
(05:31) – What is Blockrise?
(08:08) – Semi-custodial model
(11:44) – How does Blockrise work?
(18:55) – Onboarding & user journey in Bitcoin custody
(24:42) – Does Blockrise support stablecoins?
(28:34) – Fiat integration and future of stablecoins in Bitcoin lending
(32:21) – Insights from ‘Bitcoin Lending Standards’ report
(42:00) – Leveraged Bitcoin or Stay humble & stack sats?
(47:27) – Loan terms, interest rates and fees
Links:
- https://x.com/jos_lazet
- http://blockrise.com
- https://www.blockrise.com/en/resources/the-bitcoin-lending-standards-2026-article
Stephan Livera links:
- Follow me on X: @stephanlivera
- Subscribe to the podcast
- Subscribe to Substack
Transcript:
Stephan Livera (00:00)
Hi everyone and welcome back to Stephan Livera podcast. Joining me today is Jos Lazet from Blockrise. Now we’re going to be chatting about a few things. Obviously there’s been a bit of movement in the price recently so that’ll be interesting to talk about as well as the semi custodial model you’re going with with Blockrise and of course ⁓ lending discussions. I mean…
Jos Lazet (00:20)
Thank
Stephan Livera (00:20)
obvious elephant in the room. As we speak right now the price
is about $70,000 per Bitcoin and just recently we had this kind of dump down to 60k and people were really scared and thought did someone blow up? Has the body floated to the surface or is it something else? Yeah so first off welcome to the show Joss and give us your take on if you have any thought on the reason for this recent price move down.
Jos Lazet (00:46)
Yeah, thank you very much for welcoming me. ⁓ Do I have any views? don’t know. I saw this very applicable theory about this Hong Kong based company that kind of went down and was liquidated. I mean, it’s Bitcoin being Bitcoin. There’s volatility in the market and that’s fine. I think the space kind of has changed now because Bitcoin back loans like ourselves are now a bigger play.
So everyone gets more concerned. was the DDoS on strike, know, and everyone is like, yeah, what if you get liquidated in those kind of moments? So the market has definitely changed. It’s very interesting to have a look at. ⁓ I mean, when in doubt, through mouth. And of course, there’s been quite some people panicking, I would say, like more than I kind of expected. But I mean, come on, guys, it’s like the Bitcoin will be volatile for at least another five to 10 years, I think. So that’s just part of the deal.
Stephan Livera (01:41)
Yeah, and I think maybe part of that is people are, as you said, maybe there’s more people using loans now. So they’re kind of more focused on liquidation points and things like this. But I mean, it’s not that there hasn’t been leverage before that, you know, even the COVID crash in like March of 2020, there was like a big drop there. And there were a lot of kind of people worried about getting liquidated on loans and things like that. So what’s really changed is it just the absolute numbers are larger now that like even if the percentage moves are not as bad.
Is it the absolute numbers or is just there’s a lot of new people and they’re not used to it?
Jos Lazet (02:14)
Well, correct me if I’m wrong, but there used to be more like leverage like BitMEX on the exchanges and the lending side used to be a lot more institutional like Falcon X and Galaxy Digital providing services.
Stephan Livera (02:26)
Yeah, I mean there
were providers like Unchained and Ledin have been around for a little while and you know there have been some of these lending ⁓ products out there but yes recently it’s grown a lot.
Jos Lazet (02:31)
Yeah, but-
Yeah, I would say that especially since of course, the 100K mark, ⁓ a lot more retail focused products came available. So you’re right, within chains, et cetera. And they’re definitely setting standards for quite some years. it’s like, well, the fact that we introduced it and quite some others, I think that it became more common ground that there’s a market for this and it’s growing a lot. This market is growing very fast. So is the private debt mark, for example. So I think that
From a sort community perspective, a lot more people felt affected by this discretion. ⁓ And yeah, I think that, for example, the lending market will only continue to grow.
Stephan Livera (03:19)
Yeah. Do you think people got a bit lulled into thinking the volatility had gone away? That maybe people thought, it’s ETFs era. It’s, you know, there’s all these futures and options markets and so on. And so maybe that’s going to strip some of the volatility from Bitcoin. And do you think that was what has lulled people into thinking we won’t have this kind of crazy early year volatility again?
Jos Lazet (03:42)
Yeah. And I think the, I think even bigger is the four year cycle that everyone was like, it’s broken. It’s broken in the past two cycles that I was, I was there. That was definitely not the talk. And now everyone, like I’ve seen podcasts, people like arguing that the four year cycle is broken. And with last week in mind, ⁓ definitely not broken. just, it’s just moved a little bit prior to the half thing. So usually it was like a six to 12 months after the half thing, there would be the autumn high peak.
or at least the new Altamise. ⁓ That’s different now because it was reached before the halving period. But yeah, maybe some comfort. 100k, I mean, it’s been such a big moment to reach the 100k and to break it over and over again. So that definitely gave some comfort. It’s even easy to calculate. It sounds silly, I think, but for us, we’re running our financial models all the time.
Like if you have a Euro denominated administration, you need to have a Euro denominated ⁓ Bitcoin number. so we’ve been doing our coaxulations with that. It’s just easy. It’s nice. It’s easy. And now everything’s different. like for example, we’re also setting up a private Bitcoin treasury. So nothing public is just for block rise and their regulation. need to do this in a certain way. And now…
Since we started with our plans and currently rolling out the plans, can double the amount of Bitcoin in our treasury. That’s nice.
Stephan Livera (05:10)
Well yeah, mean look stacking the dip is always a good thing for Bitcoin maxis So give people an overview. What is block rise? ⁓ When did it start as I understand it’s you know, you’re a Netherlands ⁓ Bitcoin company people can ⁓ basically a custody Bitcoin and also you have loans I presume you have buy and sell also. Can you just talk to us a bit about the overview there?
Jos Lazet (05:32)
Yeah, exactly.
Yeah. Yeah. So it’s, it’s, I’m, I’m a 2013 Bitcoiner, which is, which is relevant. think I started helping people out with Bitcoin since 2015. setting up a non-custodial wallet. And at some point people were like, yeah, I trust you. Can I not just get it done by you? So I started offering more elaborate services that led to the, um, founding of Blockrise in 2017. So we’ve been around for a while.
It’s just that we’ve really focused on the software side for a long time. So I never really went out in the public, like local meetups, sure. But Blockrise was never really a platform where people could create an account, for example. So really spend a long time building the software side of Blockrise. And with COVID actually, we changed our minds and we said, okay, you know what, the software business, like we had very secure custody, really meant for the end users.
I mean, this is very difficult. Like security is such a hard pitch. So we said, you know what, let’s pivot into a platform. became a Bitcoin platform, got regulated, et cetera. And basically we have three services. So buy and sell, the broker, asset management, which is ⁓ a Bitcoin euro strategy, and we have lending. So collateralize your Bitcoin and open a loan. And then everything is done over our, what we call semi-custodial setup. So it’s not non-custodial, it’s not custodial, it’s semi-custodial.
⁓ And yeah, that’s it, fully regulated, focused on the EU. We are looking for clients minimum of 20k euros. So we have a little bit because everything happens on chain with us and everything’s quite white loft. It’s not a super retail platform, but this is exactly what I think that I started 10 years ago and it’s still very relevant that there’s non-custodial wallet solutions and don’t get me wrong, they’re great, but it’s still very difficult to do a multisig setup, for example.
So with that in mind, I wanted to have something that comes very close to it that’s not custodial, but it should not have, for example, external hardware devices. I can trust my technical setup, but for example, I’m not sure if my heirs can use my technical setup. So I wanted to have a hybrid system in between. That’s basically what Blockrise is, and there’s quite some cool quirks, and it’s very much meant for Bitcoin. So yeah, that’s it.
Stephan Livera (07:53)
Yeah,
okay, so let’s explore the semi-custodial model idea. So most people are probably used to just having a phone wallet or their cold card for hardware wallets or maybe multi-sig if they’re a bit more advanced with it. Talk to us, what is the semi-custodial model that you guys are using?
Jos Lazet (08:09)
So ⁓ the whole idea is, so it’s semi-custodial because ⁓ we use a hardware device, a hardware security module, is basically, HSM exactly, which is basically a secure element at large. so we are the owners of these HSM. The whole principle of an HSM is that it can super securely generate keys inside of the HSM and they’re not extractable. So we cannot extract them, the client cannot extract.
Stephan Livera (08:19)
Like at HSM, yep.
Jos Lazet (08:38)
So we host the setup. So we are the final responsible for this. However, the clients generate the authentication keys. So let’s say it’s a block rise key pair to the HSM and they’re the only ones with this key pair. So this key pair that they generate, has no value to the world. It’s not a Bitcoin key. It’s just a key pair that’s valid for block rise. And so if you take this principle, you have a hybrid model because we have the of the safe, the HSM.
but you have the key. So we can take the save away and your key has no value to the world. But if you assume both are online, so the client has the key, we have the HSM, then we have this hybrid model where it’s super user friendly because this key pair can be put in a mobile phone. We can take care of a lot of the security, but you also have the certainty that we cannot access your Bitcoin. So it’s a complementary model compared to, I mean,
On the one hand, there’s custodial, which we don’t have to need to have the discussion about. But on the non-custodial side, it’s of course, it’s the self-sovereignty, which is the great part. But the technical part is the downside of it. Like, let’s say you want to do trades or you want to open a loan. ⁓ It easily becomes custodial, what we see. And the non-custodial versions of loans, for example, still have its own challenges. this is the basic setup. It’s a hybrid model where we host the hardware, you have the keys.
You can verify everything that there’s not additional keys being added to your Bitcoin wallet inside of the HSM. And that’s the basis. Then what we do is, for example, for every service we provide, we derive different wallets. So you can always have an extended public key, verify all your holdings per service that you use, which is already, I think, unheard of in the market. And then based on this basic setup,
you can start trusting Blockrise basically. So you can start adding Blockrise company-owned keys, for example, for the legacy planning services. So if you have limited trust in Blockrise, you can opt in for, for example, the legacy planning service, or for example, the other one is asset management. It’s a one out of two multi-sig. So we can execute rebalances, but the client always has a key in case they want to withdraw the funds at any time.
And this is the most important thing, I think comparing it to platforms is that in any case, our clients will have a key or access to a key that they can initiate withdrawals whenever. So if you want to withdraw funds from your wallet on a Saturday night, you are not relying on block rise to be online, which is usually the case with.
Stephan Livera (11:20)
Gotcha,
so just to be clear, that’s in the asset management case or in all of the cases, okay. And so walk me through that just so, is it a phone app, the Blockrise platform, and then like a website interface or just walk me through how that part of it works also.
Jos Lazet (11:23)
No, in any case. Yeah. It’s just that…
Yeah, so we have a mobile app and we have a dashboard. It’s just that the keys are generated on the mobile phone. ⁓ So by default, you actually have two keys. One is inside of the secure element of your mobile phone, the secure enclave or the strongbox at Android. Yeah, exactly. But the thing is that one is not transferable. So if you buy a new phone, you cannot transfer this key. So we need a sort of recovery key.
Stephan Livera (11:46)
Okay.
like the Titan or whatever chip thing, yeah.
Jos Lazet (12:07)
So the recovery key is what we call the blockerized seed. A little bit inconvenient naming, working on that. But this is the recovery key. So if you buy a new phone and you don’t have the old phone present anymore, we cannot recover it for you. So you need to have the recovery kit available in order to set up your new phone.
Stephan Livera (12:25)
Got it. And that’s like the blocker seed which is different from your Bitcoin seed. Like that is not a BIP39 key, right?
Jos Lazet (12:30)
Well, it is. But it’s just that it’s not used. So it follows all the standards of the BIB39 key. Exactly.
Stephan Livera (12:37)
⁓ gotcha. So you’ve used like the same standard, but that is not the
actual Bitcoin private key relating to your Bitcoin. Yeah?
Jos Lazet (12:44)
Correct.
We have been playing with this idea of actually making it a BIP39 key, for example, with the time log function in Bitcoin. So that if you have unspent UTXOs after X amount of blocks, your block rise sees becomes an actual BIP39 key in order to recover your block rise event outside of block rise. So quite important point is that
Disaster recovery is of course super important in this case because you cannot just assume the block crisis is always online or we never go bankrupt or whatever. So it’s not live yet, but there ⁓ will be disaster recovery either with pre-signed UTXOs. So you can just ⁓ add a recovery address, pre-sign all your UTXOs to this address. And then in case that we are offline, whatever, you just publish those UTXOs and you’re good to go.
⁓ So that’s one way to do a disaster recovery.
Stephan Livera (13:42)
Okay,
gotcha, but that’s in the future, right? So for now, it is, you know, the phone has the, let’s say I, okay, I’m not a European or whatever, I’m not in the EU, but just hypothetically, let’s say I’m a customer, I have the Blockrise app on my phone, I write down my Blockrise seed, and you as Blockrise have a key inside your HSM, and then if I buy a new phone and I need to change over to the new phone, how do I do that?
Jos Lazet (13:51)
Yeah.
Correct.
So there’s two ways. One, if you opt in for the cloud backup, you create an ⁓ encrypted key pair on your cloud, like either on Google Drive or… Yeah, exactly. And then you can recover super seamlessly. But if you decide not to trust that, for example, you can just literally write down your blockerized seed, so 24-word seed, and you can just recover this on your new mobile phone.
Stephan Livera (14:22)
Right, like Apple or Google or whatever, yeah.
Okay, and if somebody gets that app, either the Apple or Google backup or my written down words, can they steal my coins or no? I presume not.
Jos Lazet (14:45)
No, because you need login, password, 2FA, email, wide listing. Then of course there’s wallet, wide listing, there’s bank account, wide listing. There’s quite some, of course, procedures. So we can build a lot of application layer protection around this. So just the block price seed has no value. You need to have full access to the account plus the block price seed in order to do anything. So that’s one, but then still you can only send funds to either a wide listed bank accounts or a wide listed Bitcoin accounts. And there’s still a, like a personal check in there.
So you always need to have a video call with one of the employees here in order to whitelist addresses. Why? Because users have significant funds in our platform. So it’s not like as easy as strike and sending funds immediately to an external address.
Stephan Livera (15:16)
Okay.
Got it.
Okay, got it. So, and then, so let’s say the Blockrise customer, so what can you do on your side unilaterally? Like you as Blockrise, what can you do without the customer kind of knowing, I guess?
Jos Lazet (15:47)
I mean, extremely, extremely limited. So ⁓ funnily enough, the regulator introduced a new term for us called negative control, meaning that we cannot control our client funds, but we can prevent them from accessing their funds currently without the disaster recovery. And the thing is that looking at it from a very sharp eye on the non-custodial side, it’s not non-custodial and we can never make it fully non-custodial even with disaster recovery.
Stephan Livera (16:02)
Okay.
Jos Lazet (16:16)
There’s ways to argue that it’s not non custodial. But I think that it’s a lot more our mission to make it super user friendly to have on-chain funds to know for a hundred percent certain that your funds are not being lent anywhere, that there’s nothing going on in the background and make it extremely user friendly. mean, users can onboard in minutes and they really, they don’t realize that they have three on-chain wallets the moment that they onboard with Blockrise.
And that every time they buy or sell Bitcoin, it’s an on-chain transaction. Like everything is super Bitcoin native. And from a platform perspective, this is unheard of. And even on the non-custodial side, again, there’s great wallets out there, like you named a few. But in my opinion, we have not seen a lot of development over last 10 years making these solutions so much better. It’s still like, I’m not so confident that, for example, my mom, who’s been in quite early Bitcoin adopters as well,
that she is very comfortable setting up a non-custodial wallet setup. And if that’s really the case, then how can we expect global adoption of Bitcoin ⁓ in a non-custodial manner? as much as I would love it, we need to have more hybrid solutions. That’s why I’ve also been praising, for example, BitKey quite a bit, because of course the security and the privacy model is not ideal, but people shouldn’t really see it that much as a sort of non-custodial wallet.
more as a attempt to make custody more user friendly because it really is not. If you talk about a single seed setup, it’s already quite challenging and we’ve seen leaks over one password or other password managers. But if you consider then a pass rate setup, it’s already more complicated. If you talk about a multi-stake setup, it becomes ridiculous. Again, talking about the most of the…
population. They’re not really ready for this. And this is so important. It’s so important to custody your Bitcoin. It’s so important to take them off platforms, to take them off exchanges and place them in a proper setup. this is just like, I think that as a Bitcoin community, we haven’t advanced enough yet to make it so doable.
Stephan Livera (18:35)
Interesting, so what would you say, I guess, I mean you’re making that case now, so let’s talk about that. So what should typical Bitcoiners ⁓ advise for their ⁓ non-Bitcoin psychopath family and friends? ⁓ How do you see that?
Jos Lazet (18:52)
I I think that it doesn’t even matter if you come from a refer bitcoin or not, but most people start on an exchange or a broker and ⁓ they don’t care about custody yet, which is fine. I mean, that’s just part of the journey that you have to go through. And if someone is really forcing it upon you on like the whole orange billing process, you probably look different at it than figuring out yourself. ⁓ So from the journey, I would say people just…
experience the volatility like last week, you know, this is part number one is you just look at it from a price perspective. And once they start looking more into the whole beer on bank principles, custody comes into play. And that’s where you, you you start with setting up a basic wallet and you withdraw some funds in there and try a transaction back, et cetera. But at some point, like, especially if you’re invested, you know, if you really start dedicating more to Bitcoin, you need to consider probably like
multiple setups. I’ve always said custody is complementary to each other. Where for example, exchanges are monopoly, I think. So everyone will switch for a cheaper exchange. with a custody solution, usually people opt in for multiple setups. mean, everyone has a mobile phone wallet or lightning wallet to do some small transactions and probably have a sort of warm setup where they have some funds available.
And then they have their cold storage setup where, where the majority of the funds are, you know, like that’s kind of setup that you in the end want to move to. I mean, that’s all part of your, your journey of your own risk appetite. How well do you want to have arranged it? And I think that like, one of the things that I was looking for, especially in the early days is sort of recommendation. Like how should I set up my funds? And I’ve learned over the years that everyone has such a different.
view on this. Like there’s people that say, you know, I’ve given up on building this complex multisig setup because it’s just not feasible for my family to recover in. So instead I’ve set up 10 different ⁓ wallets, like single-sig wallets, or maybe with a passphrase, because the odds of my family being able to use that is higher than having like properly set up three wallets, which is sadly the case, I think.
Stephan Livera (21:10)
very complicated because I can also imagine you know maybe in the future there will be just better consult like Bitcoin consultants who help you know help your family recover and of course like all the mini scripts like inheritance sort of stuff and of course the platforms that exist maybe they will be better at having like this kind of white glove support for you know your wife and your kids after we die or whatever right so
Jos Lazet (21:22)
Mm-hmm.
Yeah, but and this is the biggest challenge of Bitcoin in general, think, is that you need to find this balance between comfort, like usability and security on the other side. In the end, you cannot trust anyone with your funds, especially majority keys is something you should never do. But we also want to have this user friendliness. And I think it’s just a combined effort in order to find this balance. And blockrace is just another shot at making it more tolerable.
I mean, especially so we’ve been live for two years. So, you know, there’s been quite some growth in that time. And I’ve seen a lot of clients who were just done with having a single SIG or a non-custodial setup. I like, of course, I think this is super important for Bitcoin to have. But I think that in some way there’s just a lot of people are not built for having a non-custodial setup.
Yeah, this will remain a challenge.
Stephan Livera (22:34)
So I’m curious, do
you see the pattern being that people might onboard with you and then like migrate out or just kind of onboard with you and just stay in this block rise kind of semi-custodial model? I guess it’s maybe early for you to say, but do you see that as being a future or do you think it’s more like they’ll keep an amount on your platform that they’re doing for trading or lending, but keep, let’s say the lion’s share or larger amounts out in their own multi-sig for the larger amounts?
Jos Lazet (23:03)
So I would say the far majority comes to us for legacy planning. So they have a non-custodial setup and they just want to migrate some of their funds, let’s say 20, 30, 40, 50 % of their funds to our solution. Of course, Bitcoin Back Loans is another reason why people are opting in for us. But that’s really assuming the Bitcoin deposit side. We have a lot of, let’s say, family offices and people that are buying their first Bitcoin with us.
Stephan Livera (23:14)
Yep.
Jos Lazet (23:30)
Usually what we see is that they remain in our platform. So we’ve had a couple of family offices that took in significant funds and they, like when you reach a certain limit or an amount, then it just makes sense to do, to set up multiple custody solutions and we’ll help you with this, you know, because in the end they are quite new to this space.
So we’ve helped a couple of those, this family office set up a proper set up and they can decide how they balance their funds sort of between the custody solutions. So they have a non-custodial setup like a casa or ⁓ yeah, those kinds of things. And then they have our solution. And if they need to offload or get any loans, they’ll use our platform. ⁓ But that’s about it.
Stephan Livera (24:22)
Got it. And then in terms of dealing with the fiat wires and fiat aspects of it, do you use or offer stable coins on your platform or is it just fiat in and out?
Jos Lazet (24:33)
No, it’s so we’re we can offer our services to all over the world. It’s just that we are a euro denominated platform. yeah, and and I we had Ethereum support for the longest time also with stable coins in mind ⁓ or or mostly because of the stable coins in mind. However, the stable coin play in Europe is just not as relevant because the euro banking system is actually so good. So we don’t even have like any intermediary processors.
for banking transfers. It’s just that we have immediately like directly integrated on the SEPA. Exactly. It’s a SEPA system and we can transfer huge amounts of funds instantly over our banking network directly. So without any other parties like in between settling our transactions, we do everything ourselves. because of this, mean, Euro stablecoins have not taken off either. I was definitely a bit wrong there. Like let’s say four years ago when we made this
Stephan Livera (25:05)
Is this that Seppa thing? I’m not Euro, so Seppa, yeah.
Jos Lazet (25:31)
this decision to implement stable coins in the platform, but we’ve removed everything because we just saw that your stable coins are not taking off and it’s just less relevant. for us and all the other countries that are going big on stable coins, I understand, I see it. In Europe, it’s just not as relevant. So ⁓ it’s just that, yeah, we use the banking network directly to do all fiat site transfers.
Stephan Livera (25:57)
Perhaps that’s a consequence, let’s say, of MICA and, I guess, being brought inside the regulatory fold. Of course, that comes with certain costs, from a privacy and a regulation, ⁓ and let’s say the self-sovereignty libertarian side of it. ⁓ Would you say that interpretation is right? It’s mainly just around being brought into the regulatory fold, or is there some other explanation for it?
Jos Lazet (26:23)
Yeah,
well, Mekor is of course, there’s a lot more reason. It was officially effective from 30 December 2024. We’ve decided to use the direct banking integration from 2021. So this is definitely nothing new based on Mekor. But yeah, no, it’s like Mekor is conflicting. I understand like from a privacy perspective, but privacy is not.
really so set in the regulation. think it’s more the companies like us that we need to fight for having sufficient privacy measures in the scope of Mekar. ⁓ But it’s also great. I everyone wants, know, numbers go up and they want to have this Bitcoin price of whatever number you want to wish for. But I think that institutional adoption is a requirement for that. if it remains a niche in a retail space,
Bitcoin will never reach these super high volumes and even high prices. So, Mekor is a sort of accelerator for this. yeah, mean, this is exactly what we see. Like now we’ve opened up all the conversations with the banks and the asset managers because suddenly we have this stamp of approval on the services that we provide. And it gives them confidence that Bitcoin is here to stay.
They have a regulatory framework they can hold on to. it’s good. MiCAR is V1. There will be multiple iterations needed for it to become a lot better. There’s a lot of things that are out of scope. For example, landing is not under the scope of MiCAR. So you will see us place this disclaimer on every MiCAR, or sorry, landing-related outing that MiCAR doesn’t cover landing. So of course it’s out of scope. But I think it’s definitely a…
Stephan Livera (28:14)
Yeah.
Jos Lazet (28:16)
⁓ a step in the right direction.
Stephan Livera (28:19)
One other question just around the stablecoins. think…
Maybe some of the reason for that is also around lending. That some of the people who wanted to do lending and to do it in some form of a hybrid or self-custodial format, that might be also part of it. Although some of those platforms are also just doing straight fiat wires for the loan funding. So do you think that was also part of the reason some of the lending, Bitcoin lending collateralized startups do the stablecoin support?
Jos Lazet (28:50)
Well, I think that’s also quite a complicated question because, you know, ⁓ let’s put it this way, know, stable coins, it’s great on, I don’t know, Ethereum or Slana or whatever other chain you’re using, but that also means that if you want to have it fully non-custodial or decentralized, you need to have wrapped Bitcoin. And this is one thing that I’m just really not a fan of. So I’d have native Bitcoin, in our case, just on-chain Bitcoin.
And euros, which of course, euros is the trusted aspect because that’s a nice thing. you, if you bring lending to a decentralized platform, you can make this like full circle, full loop covered, you know, you can fix everything in smart contracts, et cetera. But I really don’t want to have exposure to red Bitcoin, even though it’s so big and it’s, it had never really had issues. It’s, too much of a risk.
Stephan Livera (29:40)
Right. Yeah, but I mean,
that would be even like the WBTC, the example you’re talking about there, like BitGo’s one and Justin Sun and whatever with Ethereum. But let’s say even in Bitcoin land, like Liquid Bitcoin or, ⁓ you know, some of these other ones. Yeah.
Jos Lazet (29:46)
Exactly.
Yeah, so Taproot Assets for example.
Yeah, Taproot Assets, like, so for example, if you use UDT, so Tether launches Taproot Assets where we can have ⁓ UDT on Lightning, for example, it’s going to be a game changer. I think that even Ambos announced over the weekend or last week, the first exactly, Rails X, I think it’s called. It’s like a decentralized exchange on Lightning.
Stephan Livera (30:14)
This rails thing, yeah.
Jos Lazet (30:22)
That is the kind of stuff that we need. from a block rise perspective, we will be super happy to move that direction. mean, if it’s like, because so for example, unfortunately, we don’t support lightning. Why? Because our transactions are just too big for lightning in general.
Stephan Livera (30:37)
Right, the
model just doesn’t work even, you know, your model is kind of more on-chain and what we’re talking about is for larger, of, bigger, top or higher end of town customers anyway, they’re not doing like $50 transactions.
Jos Lazet (30:49)
Exactly. So liquid, for example, is something that we’re definitely going to have a look at in the near future because it’s also this hybrid model that can be super interesting, more instant, know, don’t rely on on-chain, but have this liquid implementations there.
Stephan Livera (31:02)
Yeah. And the other aspect
is DLCs as well. So I know there’s a few startups doing that. So I did an interview recently with LIGOs, and their idea is to sort of do like, you know, it’s kind of on chain, right? And have ⁓ in the future, I think they will have like stable coin offerings on that.
Jos Lazet (31:21)
Yeah, so I think that for us, mean, we’re just, I would say, native on chain for the time being, and we’re doing quite of our inventions there. Like we have the presigning of UTXO, so for limit orders, those kinds of things. There’s enough to advance there. And I’m very happy that other companies are experimenting and launching products on the other layers. And once it’s suitable for our clients and it matches the data that we have, we’ll be the first integrate.
Stephan Livera (31:34)
Yeah.
Of course, yeah.
And I know even on the lending side, think, is it Firefish? I think they’re doing something like a PSBT or pre-sign sort of form of lending also, so it’s a bit more complicated there. I also wanted to chat about, while we’re talking about lending, we might as well chat a bit about your report. I see that your team recently put out this report. It’s called the Bitcoin Lending Standards of 2026. So listeners, I’ll put the link in the show notes. But do you want to just give us any high-level interesting insights that your team pulled out here from that?
Jos Lazet (32:20)
Yeah, so we’ve always been researching a lot on the market, obviously. We’ve been around for quite some time. And yeah, with the launch of Bitcoin Back Loans, we were like, okay, let’s look deep into what has happened. What is the traction of the last year? Who are the players? And is Dread 5 finally coming in? So it’s a very Bitcoin native piece. It’s quite elaborate. It’s quite technical, I would say. So we’re going to…
sort of republish on weekly basis ⁓ parts of these articles, like the key points in order to elaborate it for the greater public. I mean, it really makes clear which of course, I mean, obviously we’re biased. mean, we’re super biased. We’re super long on Bitcoin. ⁓ I think that for the lending standards to make sense, you need to assume a keger of Bitcoin above.
Well, let’s say 15%, you know, at least as a bare minimum, a lot of people are closer to 20 or 35 % when it has been over the last few years. ⁓ because otherwise the, the, the cost of lending don’t make sense compared to the performance of Bitcoin. But if you, if you assume this, then the lending game will be here. It will remain. The fees will get a lot more competitive. We’re going to see like what we see on our end as well. You know, StratFi is.
entering from the secured lending side. So they’re providing fiat for Bitcoin back loans, for example, and getting your yield. So this is basically what we dive into. It’s a really Bitcoin denominated view. yeah, I mean, the reactions on this article have been great. And it’s just one of the pieces that we decided to publish. There will be a lot more, like actually the next one will be on custody. There will be a Bitcoin as the denominator as an article. yeah.
Stephan Livera (34:12)
Yeah, a few things I wanted to pull out from my read of this ⁓ one interesting point that I think probably many of us had a feeling for this but it was good to have it explicitly called out so there’s a point here the guys wrote Comparative analysis for a traditional EU bank under Basel 3 Bitcoin is collateral is and basically they’re talking about how it’s much You know, it’s 44 X more capital intensive than a residential mortgage 14 times more capital intensive than a commercial real estate 5x more capital intensive than listed equities and not even comparable to
gold and that explains and they’re saying that’s why it’s mainly been non-bank lenders like family offices and debt funds who are leading the market development which kind of intuitively makes sense right because when I talk to people in Bitcoin lending world they’re sort of like
I can’t offer the same rates that the big banks are offering you, especially in the US case where they’ve got nice low rates, because it’s fiat subsidized. It’s government, it’s literally, well, in a sense, government and central bank subsidized. And that’s why on the, while often we talk about lending from the customer, the borrower’s side of the house, actually there’s also the lender’s side of the house. in many cases, when I’m talking to people, that tends to be people who are like either a fund or a family office or they’re sourcing
the money from a family office because these are the people who can provide the capital.
Jos Lazet (35:31)
Yeah, no, so it’s clear that the private debt marks, which is I think the market as a whole you’re talking about, is there to take this. like from a more practical perspective, what we’re seeing is that people still see it as a sort of, some people, sorry, still see it as sort of investment. And then they think that the interest rates that we’re offering is even too low. So from a secure lending perspective. And even though they, because they really don’t grasp Bitcoin. So they’re really afraid that
Bitcoin can get to zero so that we cannot even liquidate or get close to it because that’s in the end, you know, they’re here for the euro yield. And honestly, like we’re talking a lot with banks and there’s a couple, I would say global banks that are open to discuss Bitcoin backed bonds as we call them. So this is the secure landing site. It will take years.
It’s just realistically talking like no, like Basel is not going to be updated anytime soon. Micra is not going to cover it anytime soon. So a minimum of I would say three to five years before banks are really going to adopt this in the way that we would like to see it. This is just realistically talking, I think. ⁓ In the meantime, the private debt market will continue to grow. Most likely it’s been, it’s been growing enormously and this is where we need to get our funding from.
As Bitcoin becomes more understood, people are more willing to provide the depth that Bitcoin back loans need. you know, because to give you an example, I think there’s close to 800 billion euros in the Dutch savings accounts. So retail with savings account, 800 billion. Like the Netherlands is winning in having the most savings at a less than 1 % interest rate.
Stephan Livera (37:20)
ridiculous.
Jos Lazet (37:21)
Yes. And so we have this secured lending proposition where they get 6 % interest rate because their savings are being used to collateralize Bitcoin lending. And you know, this is exactly the play. And there’s a couple other like secured lending companies, not Bitcoin related in the Netherlands, and they’re offering 4%, which is already considered a game changer, you know, for people with savings.
I mean, this is our primary focus. Like European markets, ⁓ if you have less than 1 % on interest on your bank account, you might as well consider this. And it’s very transparent. It’s very clear how we do it. And there’s no secret sauce. Everything’s quite open and transparent. So this is the game that we’re playing.
Maybe someday a bank is willing to take the risk or to make a case and offer this within their services, but I think it’s going to take some time. which is another interesting conversation, is that we become the bank or the credit institution. Which is, think, not that in feasible, it just takes a lot of time and money, but it’s definitely sort of childhood dream to become a credit institution and just provide these services by yourself.
In that way, mean, you don’t get around Bezo obviously, but you can get pretty far, I think. And also because it takes about three years. once, you know, and you can start pushing more for regulation if you’re a credit institution, of course the lobbying, et cetera. And that way we could become in the future, a potential, you know, Bitcoin native institution on the banking side. It’s quite a far dream.
Stephan Livera (39:04)
Interesting. And so we’re seeing a lot
of competition in that way because like, yes, there’s this whole Bitcoin lending and collateralized and, you know, put off some fiat, earn some fiat yield based on the Bitcoin borrowers on that other side of that. But kind of in a broader sense, there’s a competition from, let’s say, stretch like STRC from, you know, because they’re paying like 11 or 12 percent like in the US or in US dollar terms. And I’m sure other, you know, MetaPlanet will come out with their own one and strive to have SATA in the US. But I’m sure, you know, it’s a matter of time.
There’ll be probably some European treasury company, whether it’s treasury in the Netherlands or ⁓ what’s the other one, Capital B or H100 or one of these European treasury companies will eventually get to the size that they will start doing a similar play and then it’s sort of competing in that sense. Now of course, it’s a big market, there’s room for lots of players, but that might be some of the comparative analysis going on.
Jos Lazet (39:59)
Well, think that first of all, for now, we’re so early still. And this is saying 10 years professionally in this market that for now, I also tell all my European founders, the Bitcoin founders that I talk to, is like, let’s team up because this market is so big, we’re still so early that we’re not going to be real competition in the near term.
That said, Stretch and SATA, et cetera, are really a different product than Bitcoin back lines. So it’s kind of the same, you know, like a scene of course, but I think that Stretch and SATA are definitely a lot higher risk because they use the bonds to buy Bitcoin. And in our case, it’s over collateralized lending. So, you know, if the rates drop, if the loan to value of our loans drop at some point, we really don’t want to, but at some point we need to liquidate.
And then at the liquidation level, is 85 % LTV, then it means that there’s still an over collateralization of 118%. So we still have an 18 % buffer before the loan is underwater. And this is, I think, relatively low risk, relatively, obviously, compared to a stretch where it’s literally a bond buying Bitcoin.
And then it’s assuming a CAGR of above the rate that they are providing in Fiat, so they will survive. And don’t get me wrong, this is definitely a product we’re looking at as well. ⁓ We’ll probably offer it in the short term, one or two years. But it’s a very different profile from the secured lending perspective.
Stephan Livera (41:43)
Interesting, yeah.
And also, I mean, coming back to what we were saying at the start, right, this big drop recently, I think, and then you got a new round of people saying, look, see, that’s why you should never do leverage. You should just like self custody only stay humble stacks that I’m sure you’ve heard the same message. ⁓ What, what do you make on that? Does this recent price drop show people that, okay, yeah, there’s all this volatility, you should be wary about doing any kind of Bitcoin loan. But on the other hand, of course, there’s the obvious case of like, hey, if you believe Bitcoin category is going to be greater than the interest rate,
right? Where do you balance all of that out?
Jos Lazet (42:19)
Risk appetite. Even if you take leverage on an exchange, it’s all on risk appetite. It’s like, how much risk are you willing to take? If you take a loan out in our platform and you decide to be under 10 % loan to value, meaning Bitcoin needs to drop 90 % in order for you to be liquidated, it’s very different than taking the maximum allowed loan to value when opening your loan.
Yeah, so this is it. It all depends on your risk appetite. think it can be feasible if you’re loan to value or you have sufficient capital available in order to cover your margin calls. But in the end, a margin call is already too late, I think. So it’s better to be upfront and to say, hey, only take a loan out where you’re comfortable, where you think that Bitcoin won’t reach and even take some buffer on that.
When you open our loan, you’ll see your liquidation price. You’ll see your margin price per Bitcoin. And that’s key. Be super focused on that. And we’ll take measures on our side to filter out flash crashes by taking weighted average prices and only taking one hour intervals, et cetera, because we really don’t want to liquidate as well. ⁓ this is where it needs to be because otherwise, like there’s…
There’s just too many cases where I had to sell Bitcoin over the years where I really didn’t want to, but there was no way I could get liquidity. And especially as a, like I was a Bitcoiner since the age of 16. So I didn’t have any other, like I never was able, I was never able to open a mortgage, for example, because all my life has been around Bitcoin since I started. And yeah, I mean, selling was the only option and now I have another.
method available where I can get liquidity because I want to live on that Bitcoin standard. But yeah, mean, what else can you do? Like, I cannot really stack fiat because I have a Bitcoin company. mean, you know, this easily becomes complicated.
Stephan Livera (44:29)
Yeah, and I think it just comes down to look, there’s no one size fits all here. I think there are some people who just take a straight principled like just no debt ever. Some people are somewhere in the middle of like, okay, it can make sense for some people. then you’ve got full DGN, who are people who are taking loans when they shouldn’t be, let’s be honest, right? So I think it’s kind of finding the right audience, the right kind of person for whom this could potentially make sense. And of course, structuring things the right way. Like I think there’s an interesting ⁓ chart or table you have or infographic
actually in the standards doc, maybe we’ll put it up here, but basically this idea of if you’re going with a 30 % starting LTV, you can survive a 65 % price crash. And I would say if you’re gonna do this, you should even have a bit more in reserve that you’re able to put in so that you can top up the loan collateral so that you’re not putting yourself at too much risk of getting liquidated. it’s not for everybody, I’ll say that.
Jos Lazet (45:28)
Yeah. And I think it’s also like, it’s clear that it’s a great product and the biggest risk that we’re having is the liquidation. there’s also like, think salt lending offers these non liquidative ⁓ loans. So there’s still a lot of room where we can grow and we can say, okay, hey, there’s a certain fee per hour. don’t know, whatever, because we open a, let’s say a short position, the moment that you would be liquidated and we’ll charge you by the hour.
until you are able to recover your loan, those kinds of things. So there’s lots of opportunities still there. Bitcoin Backloads in its current form is just the first version of the service and this is where we go forward. And that’s why I think from a Bitcoin perspective, it’s good to talk with other companies to see what they’re doing and to share knowledge. This is something that I greatly appreciate from strategy as well because they have been inventing financial instruments on Bitcoin.
basically and setting some standards. So there’s just a lot to do. And this is also what I would say the other way around is it’s very cool. It’s such an honor to work in this space where, you know, like we’re thinking of credit lines. you just, instead of opening a loan, really, there’s just instant liquidity available. If you have that, you can connect it to a payments card, which is something that I would really need myself. So I can…
go back to living on the Bitcoin standard fully autonomously, like just for every payment, there’s basically an instant credit being charged and I can cover all the fees all instantly over a bank account, like those kinds of things. That’s where I see the near future exactly.
Stephan Livera (47:10)
where it’s going longer term, yeah. So as
we stand today, can you give people an idea just on like the loan term, the interest rates you’re offering, and like rolling over, this kind of thing. Just give us kind of the high level on the rates and the term.
Jos Lazet (47:25)
Yeah, so it’s Euro denominated. Basically we can welcome anyone, but it’s it’s Euro denominated 8 % interest fixed interest. Um, and then 12 month terms, can refinance them 30 days in advance. There’s a one-time origination fee. There’s a custody fee that we charge, um, liquidation fee, those kinds of things. But the main one of course is the 8 % fixed interest. And, um, yeah, I mean, I really hope that.
the prices of the secure landing will drop, like the interest rates there, so we can also make it even more attractive because we’re quite competitive today. If you compare it to DebitFi or Firefish, the other platforms in Europe active, of course, Strike is also active. We’re quite competitive there because I think the average that we see is around 11, 12%. But there’s always, like, again, it’s beneficial for everyone to be lower in the end.
We need to have a bit of margin ⁓ for capital management. of course, as we’re a company, need to, yeah, exactly. But I think it’s like, it’s, pretty neat already.
Stephan Livera (48:25)
You gotta make money. Yeah.
Yep. And on the just brokerage, right? Just buying and selling Bitcoin. What are the fees there?
Jos Lazet (48:36)
So yeah, if we go over all the fees, so there’s the 25 bips custody fee for all Bitcoin in our platform. There’s 50 bips on the broker. So buy and sell. There is asset management, which is 1.5 % management fee and a performance fee. So it’s a Bitcoin euro managed fund. it’s fully native on chain. You have your own wallets, but we just maintain a Bitcoin position and a euro position. The euro position goes between 0 and 60%.
⁓ The idea is that in a bull market you dollar cost average out very, very slowly into a euro position and in the bear market you dollar cost average in. It’s really built for people that want to start with Bitcoin, but they’re very used to a traditional fund kind of structure, but we wanted to give them native Bitcoin exposure. As you can tell, those fees are really not Bitcoin native.
So this is something we’re working on. We’re really working on restructuring asset management in a way that it might even become difficult to choose between having your own custody directly or using our asset management, where now the fee difference is so large that we need to revisit this. And then there will be multiple forms of asset management also in the near future because of Bitcoin back loans.
Stephan Livera (49:52)
So the asset
management is like that is a particular strategy as you mentioned this kind of DCA out on the way up and DCA in on the way when the price is going down sort of loosely speaking.
Jos Lazet (50:02)
Yeah,
exactly. that’s it. And so it comes down to about the same performance of Bitcoin with half of the volatility. And there’s a target audience for this. ⁓ The interesting thing is that it’s based on the difficulty regression model, which is quite a famous model, I would say, out there. So we look at the regression model of the difficulty changing over time. And you compare this sort of what we call difficulty regression price. So it’s a sort of.
You can say it’s a sort of Bitcoin mining price. Very bluntly put. And we compare this to the market price. So when we see a large
Stephan Livera (50:41)
as in sort
of loosely like a cost of production? Okay.
Jos Lazet (50:44)
Yes, correct. And then you compare this
to the market price and then based on the premium, you start dollar cost averaging out. Or if it goes the premium and the market price get very close to each other, you start dollar cost averaging in. So it’s a very passive model, monthly rebalances, et cetera. But it’s just, again, for the people that want to have Bitcoin exposure, but they want to have it managed. So they want to have a monthly rebalance because they think their funds need to be actively managed. This is a product for them.
Stephan Livera (51:13)
So product for them. Whereas if you’re just a straight hodler or just a typical, you know, stay humble, stack stuff, you can just obviously just buy and hodl and do the normal. ⁓
Jos Lazet (51:20)
Yeah, so
you can see the platform as a sort of a skill of risk appetite. So we offer on the lowest risk, we offer asset management. Because if you have a pool of Bitcoin and you add one euro, you already have less risk than having a pool of Bitcoin. So from this perspective, you can say, OK, asset management is definitely the lowest volatility, is the lowest risk. Then you have custody. Then you get lending. Then you get leverage. And then you can go on very far on this skill.
But that’s the range of services that we provide. And honestly, considering that we’ve built for quite a long time, these are the main three products that we’re going to have. So a custody product, a SM management product, and lending related products. And that’s it. And that’s going to be the focus for the next two years, just vertically making these services a lot better, but not from a, like, we’re not going to add many more services on the short term.
Stephan Livera (52:14)
Okay, yeah, well I think that’s a pretty good overview. A lot of different ⁓ concepts that we spoke about there and bit of updates on what’s happening in the market there. listeners find blockrise.com and Joss, thank you for joining me today.
Jos Lazet (52:30)
Thanks for the invite.