Unchained Capital heads into spring on quite the roll.
The financial services company offering loans secured with Bitcoin as collateral recently received their California Financial Lender License, a move allowing them to begin offering cryptocurrency-secured loans in the state.
Co-founder and CEO Joe Kelly said the development will help Unchained Capital, which was seeing growth before the announcement. Originations were consistently around the $1 million monthly rate, with close to $3 million outstanding. Given the strong interest in cryptocurrency in California, look for these numbers to rise, as a technology-focused culture gets the opportunity to invest.
“We’re the first cryptocurrency lender in the state, which has quite restrictive requirements. We have a huge backlog of requested accounts from Californians,” Mr. Kelly said.
Unchained Capital has also released an open-source multisig contract for Ethereum which enables Ethereum holders and services to take part in multisig transactions safely and simply using their hardware wallets. The smart contract is accessible via a hosted dApp.
“We’ve been wanting to lend against Ethereum for quite a while,” co-founder and CSO Dhruv Bansal explained.
It took until now to develop a proper multisig contract because Ethereum essentially offered so many different options, each with their own implications, that it took developers this long to grab a piece of code that met Unchained Capital’s needs, he added.
The open-source smart contract implements 2-of-3 multisig while interfacing with the Trezor Wallet to simplify multisig accessibility for Ethereum coin holders.
“We believe previous efforts at Ethereum multisig failed because they regarded the expressiveness of Ethereum as an opportunity instead of as a risk,” Mr. Kelly said. “We adopted instead a simple, straightforward design to maximize security. Our Ethereum multisig contract uses no external contracts, no libraries, and has minimal internal state. This avoids many sources of bugs and makes our contract easier to reason about.”
The built-in dApp lets users create and interact with the contract directly from their browsers. Ledger support is in the works.
Unchained also launched a bug bounty with potential rewards of $150,000. Learn more here.
“We’re offering the bug bounty to make sure our contract is the best it can possibly be,” Mr. Bansal said. “We’ve been diligently working to develop a secure contract. At the same time, we believe it is our responsibility to incentivize the developer community. It’s the single best way to ensure that our contract is both easy to use and as secure as possible.”
Should the bug bounty be successful, Unchained plans to use their Ethereum multisig smart contract for loans against ETH as collateral.
Unchained Capital rates of 12-18 per cent APR and loan periods ranging from 3-60 months. Terms include a 50 per cent LTV ratio and monthly interest-only payments. Borrowers do not have to repay the principal until the end of the loan period, when they are free to renew their loan if they so choose.
Leran more about Unchained Capital in this Bankless Times profile.