Firefish

Firefish is a Bitcoin-backed lending marketplace that connects borrowers and lenders directly, using Bitcoin as collateral and stablecoins as the loan currency. The platform focuses on providing liquidity to long-term Bitcoin holders without requiring them to sell their BTC.

Firefish operates as a non-custodial, escrow-based marketplace rather than a traditional centralized lender. The model is designed to reduce counterparty risk by structuring loans through multi-signature escrow contracts.

How Firefish Loans Work

Firefish enables users to borrow stablecoins by locking up Bitcoin as collateral.

1. Collateral

• Asset accepted: Bitcoin (BTC)
• BTC is locked in a multisig escrow setup for the duration of the loan.
• The borrower retains exposure to BTC price movements.

2. Loan Currency

• Loans are typically issued in stablecoins (such as USDT or USDC).
• Loan offers are funded by individual lenders on the marketplace.

3. Loan Terms

• Loan-to-Value (LTV): 40–60%, depending on agreement.
• Duration: 3–24 months.
• Interest Rates: Market-driven. Rates are set by lenders and vary depending on demand, duration, and LTV.
• Repayment: Bullet repayment (principal + interest at maturity) is typical.

4. Liquidation Mechanism

If BTC collateral value falls and breaches predefined thresholds:

• A margin call may be triggered.
• If unresolved, collateral can be liquidated to protect lenders.

Because the platform is marketplace-driven, risk parameters depend on negotiated terms rather than fixed platform-wide rates.

Key Features

• Peer-to-peer structure: Lenders and borrowers transact directly.
• Multisig escrow: Reduces reliance on centralized custody.
• Fixed-term structure: Clear repayment schedule.
• No need to sell BTC: Borrowers maintain upside exposure.

Who It’s For

Firefish is best suited for:

• Bitcoin holders seeking liquidity without triggering a taxable sale.
• Users comfortable with structured, collateralized lending mechanics.
• Participants who prefer escrow-based arrangements over centralized yield platforms.

Bottom Line

Firefish positions itself as a structured, Bitcoin-native lending marketplace. It differs from centralized crypto lenders by emphasizing escrow-based loan contracts and peer-funded liquidity. Borrowers gain access to stablecoin liquidity while maintaining BTC exposure, and lenders earn yield backed by overcollateralized Bitcoin positions.

As with any crypto-backed lending platform, users should carefully evaluate collateral risk, liquidation thresholds, and counterparty structure before participating.