Mauricio Di Bartolomeo, founder and Chief Technique Officer at Ledn, is aware of the true worth of Bitcoin firsthand.
Born and raised in Venezuela, Mauricio’s household lived by means of the financial collapse attributable to hyperinflation and authoritarian insurance policies underneath Chavez’s regime.
“I noticed Chavez come into energy and begin dismantling the entire operation,” Mauricio recollects.
“My household, my mates, all suffered from hyperinflation. They made shopping for {dollars} unlawful in Venezuela so that they principally pressured you to get debased.”
The scenario rapidly deteriorated as the federal government tightened its grip.
“Individuals began shopping for non-perishables like cans of tuna, luggage of rice and began bartering with one another to type of keep away from having to carry the foreign money,” he explains.
“Then the federal government began limiting the quantity of rice you would purchase, the cans of tuna you would purchase, and they also simply saved forcing you and forcing you into poverty.”
Mauricio had left Venezuela to review in Canada, turning into “the lone child from his household who was despatched away to review overseas as a result of when nations are falling aside. Households sometimes select their most keen child and despatched them overseas.”
In the meantime, his youthful brother, a current college graduate, was decided to remain in Venezuela regardless of their father’s encouragement to depart.
The turning level got here when his brother found bitcoin mining by means of a good friend from Houston. Venezuela’s backed hydroelectric energy meant mining prices had been minimal.
“My brother involves my dad with an ultimatum and says both you fund this and help me or I’m gone, I’m leaving the home,” Mauricio recounts.
Initially skeptical, Mauricio’s perspective remodeled fully throughout a Christmas go to in 2015.
His brother had not solely paid again their preliminary funding however doubled his mining operation. It was the one rising enterprise amongst their friends who had been liquidating belongings to flee the nation.
The magical second got here when his brother demonstrated how Bitcoin may bypass Venezuela’s economic limitations:
“He sends the bitcoin to an trade on the time, Sir Bitcoin it was referred to as, after which the bolívars hit my checking account at the actual greenback price, not the federal government pretend price, on the precise actual worth.
“At that time, I nonetheless get goosebumps after I inform the story…my brother discovered freedom money.’”
The revelation unfold like wildfire. “Not too lengthy after that my cousins began mining, my uncle began mining, my mates began mining, our contractor began mining, our staff began mining,”
Mauricio remembers with enthusiasm.
Impressed by his brother’s success, Mauricio partnered along with his college good friend Adam to launch mining operations in Canada.
However they rapidly encountered a standard problem: “We had bitcoin revenues which we wished to maintain, no person wished to promote it.
“However we had fiat bills, and we didn’t wish to promote our bitcoin to pay for bills, however we additionally didn’t wish to promote our bitcoin to purchase extra gear.”
Their seek for financing choices the place they may borrow in opposition to their bitcoin holdings was met with ridicule.
“We begin getting laughed out of rooms and we’re informed we’re lunatics, that this isn’t an asset, who would ever do this,” he says.
This expertise sparked the thought for Ledn. An easy lending service that will assist bitcoin holders entry liquidity with out sacrificing their long-term holdings.
“Ledn got here from this quite simple thought which is that we wish to assist folks in Canada, notably miners, get the {dollars} they want with out promoting their Bitcoin,” Mauricio explains.
He highlights the distinction of their method with the companies that created “loopy protocols with tokenomics” and questionable regulatory practices that led to many “crypto firms” going underneath in 2022.
Based in August 2018, Ledn accomplished “Canada’s first Bitcoin-backed mortgage in November 2018 to one of many greatest cost processors in Canada.”
From the start, Mauricio envisioned a world product.
“If we nailed the mannequin in Canada and the collateral was bitcoin, and the mortgage would have the ability to fulfill the best requirements of client safety, we may then take this product to anybody, anyplace that had bitcoin.
“My bitcoin from Colombia is similar as a Canadian bitcoin, it’s the identical as a Zimbabwe bitcoin.”
As we speak, Ledn is headquartered within the Cayman Islands, the place it operates underneath the regulatory framework of the Cayman Islands Financial Authority.
Survival By Self-discipline
Whereas many digital asset lending platforms collapsed spectacularly lately, Ledn has thrived. Mauricio attributes this success to 1 essential issue: self-discipline.
“The most important problem as a founder and as a enterprise on this trade that’s rising so quick is having the ability to say no and to remain disciplined,” he emphasizes.
Not like opponents who chased progress by supporting each new token that emerged, Ledn maintained strict requirements.
“These firms that went underneath didn’t essentially go underneath due to what they did. Collateralized lending could be carried out very merely.
You give me an asset, I preserve it protected, I offer you some {dollars}, you pay me again, you get the asset again. It’s not that onerous. It’s been carried out since Babylonian instances with seeds and gold and goats,” Mauricio factors out.
“What screws it up is the way you do it.”
He describes how different platforms rushed to help speculative tokens to artificially inflate their belongings underneath administration:
“Again then there was this massive rush to balloon your belongings on the platform as a result of VCs had been valuing firms based mostly on what number of belongings that they had on the platform.
“They didn’t care about earnings, they didn’t care about revenues, they didn’t care about merchandise.”
In distinction, Ledn has at all times targeted on established belongings with deep liquidity, “The most important factor for us is we want to have the ability to get out of the place. Getting in is straightforward, it’s getting out, proper?”
Transparency has additionally been basic to Ledn’s method. “We’re the one lender in the present day and the primary lender to ever do it, and I believe we’re nonetheless the one ones in the present day to do proof of reserves on an ongoing foundation,” Mauricio says.
“Each six months, Ledn has a licensed public accountant that will get a dump of all of our consumer information, anonymized, and all of our asset positions, they usually test that we’ve got sufficient belongings to fulfill our consumer liabilities.”
This dedication to verifiable reserves extends to their purchasers: “Importantly, it’s a proof of reserves report that additionally consists of liabilities.
“You as a consumer can see that I reported your stability to the penny—and to the Satoshi—to the accountant appropriately, and if it’s not proper, you’ll be able to ring all the alarms.”
Stablecoins and World Monetary Inclusion
Ledn’s early embrace of stablecoins additional demonstrates their responsiveness to real-world consumer wants, particularly in unstable areas.
When Venezuelan purchasers requested mortgage disbursements in bitcoin moderately than by means of conventional banking channels, Mauricio was initially puzzled.
“Please ship me the disbursements of my mortgage or my proceeds in bitcoin,” they might request. “I used to be like, ‘Why would you need it in Bitcoin?’
“And it’s like, ‘No, it’s as a result of I commerce my bitcoin within the P2P markets and I get my money. I don’t belief my banks. I don’t wish to undergo the banks.’”
This skepticism towards conventional banking is deeply rooted in regional expertise.
“In Latin America, banks are just like the World Cup, each 4 years there’s a banking disaster and everybody in a single explicit nation loses all of its cash,” Mauricio jokes. “So we as Latinos are very jaded with our banking system.”
The adoption of stablecoins grew to become important for serving these markets.
“Would you wish to use these banks when they’re managed by the people who find themselves coming after you and your wealth? Most likely not,” he explains.
“They’d then say, ‘Okay, I’ll make the stablecoin work. I’ll use stablecoins as a result of I belief them far more than I belief my financial institution.’”
The Way forward for Bitcoin-Backed Lending
Mauricio sees Bitcoin-backed lending as the inspiration for a extra equitable world monetary system.
“From a collateralized lending perspective, 80% of the debt on this planet is collateralized,” he notes.
Conventional collateral like real estate or gold varies in worth relying on its location, creating inherent inequalities.
“The best way I underwrite a home in Colombia could be very totally different than the way in which I underwrite a home within the U.S., very totally different than the way in which I underwrite a home in India.
“Actually, even when you have gold in a Venezuelan vault, I can’t underwrite you a similar as when you have gold in a Swiss vault.”
Bitcoin adjustments this equation fully.
“With Bitcoin, Ledn in the present day can lend to folks in Medellín on the identical charges as folks in Madrid and the identical charges as folks in Miami, and that to me is monetary inclusion in the present day not some summary BS factor that’s coming.”
The corporate’s current efficiency validates this imaginative and prescient.
“This was our greatest quarter within the historical past of the enterprise. We did over $300 million price of bitcoin-backed loans to folks not desirous to promote their bitcoin within the first quarter,” Mauricio reveals, noting this represents a number of instances their earlier yr’s quantity.
As bitcoin good points acceptance as a reserve asset for governments and companies worldwide, Mauricio predicts Bitcoin-backed lending will essentially reshape world finance.
“I see a future the place borrowing in opposition to your bitcoin will probably be cheaper, quicker, and extra environment friendly than borrowing in opposition to every other asset, and that is purely math.”
The implications for world financial alternative are profound.
“It’s very totally different if you happen to’re a succesful, extremely bold American child and daddy has entry to a HELOC at 3% and so he can bankroll my enterprise.
“But when daddy has no entry and I’m the identical man, simply occurred to be dwelling in Medellín, the world’s not higher off.”
Bitcoin-backed lending addresses this disparity: “Now everybody could have entry to aggressive, truthful funding, having the identical asset, and I as a lender gained’t have to fret about taking over extra danger.
“I believe it’s going to unlock a wave of builders that had been restrained for lack of entry to mortgage and financing.”
As Bitcoin continues its march towards mainstream adoption, Mauricio Di Bartolomeo and Ledn stand on the forefront of the monetary revolution it permits.
They’ve created a bridge between conventional finance and the borderless potential of digital belongings.
Typically probably the most revolutionary method is constructing on timeless monetary ideas, simply with a extra democratic, world basis.
What started as an answer to a private downside in Venezuela has advanced right into a imaginative and prescient for financial inclusion that transcends borders.
Proving that Bitcoin isn’t simply altering who has entry to capital, however essentially rewriting the foundations of who will get to take part within the world financial system.