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In this episode of Unchained Premium, Alexander Blume, co-founder and CEO of Two Prime, and Matteo Pandolfi, co-founder and CEO of Pareto, joined Laura to talk about the Bitcoin lending vault their firms built together.
The conversation covers why Matteo thinks the principles behind institutional credit don’t need reinventing but its infrastructure does, and how Two Prime gathers wrapped bitcoin onchain while lending it offchain to vetted borrowers, as it has with about $4 billion in Bitcoin-backed loans. They also cover how the vault’s receipt token plugs into Morpho for looping.
Alex makes the case that struggling private credit firms end up seeking distribution onchain, and that the yields offered by Bitcoin L2s like Babylon and Stacks are VC-funded subsidies. Plus, how Two Prime started lending in 2022 as Celsius and FTX collapsed, and why Alex says the SEC’s innovation exemption leaves much of the value of vaults offshore for now.
Show Highlights:
- How Pareto brings the lending lifecycle onchain, from capital allocation and interest accrual to repayment, reporting and redemption
- Why Matteo says the legal and financial principles behind institutional credit don’t need to be reinvented, but the infrastructure supporting them does
- Why private credit’s illiquidity creates friction during redemptions, and how onchain secondary markets and repo could ease it
- Why Alex thinks crypto attracts adverse selection from private credit firms struggling in traditional markets
- Why Alex calls Bitcoin L2 yields from projects like Babylon and Stacks VC-funded subsidies
- How Two Prime keeps only the gathering of assets onchain and lends the bitcoin the way it always has
- How the vault’s receipt token can be used in Morpho vaults for looping, and why Two Prime became a Morpho curator
- Why Alex says the SEC’s innovation exemption keeps much of the value of vaults offshore, and how tokenized equities from ICE could change that
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