Built on Bitcoin with Jacob Brown Better (Safer) Bitcoin Loans with Lygos Finance with Jay Patel & Matthew Black
Nov 25, 2025
Matthew Black and Jay Patel, co-founders of Lygos Finance, share insights from their backgrounds in Bitcoin and lending. They discuss why non-custodial loans are the future, focusing on Discreet Log Contracts as the potential 'Holy Grail' for Bitcoin-backed lending. The conversation delves into institutional interest in Bitcoin as collateral, and the notable differences in interest rates between DeFi and CeFi. Listeners will also learn about Lygos' approach to provide loans while keeping borrowers' keys secure.
AI Snips
Chapters
Transcript
Episode notes
From Banking To Building Bitcoin Lending
- Jay moved from traditional banking to Anchorage after realizing finance was the wrong side for him.
- He helped build custodial lending and tri‑party collateral before leaving to focus on non‑custodial loans.
DLCs Fit Loans Better Than Options
- Discreet Log Contracts (DLCs) codify outcomes ahead of time, making them ideal for Bitcoin-backed loans.
- DLCs reduce counterparty risk by locking BTC into predefined spend paths for repay, default, or liquidation.
Pivot From Options To Loans
- Atomic Finance began as Atomic Loans aiming at BTC‑ETH swaps and later pivoted to DLC‑based options and yield.
- They scaled to ~200 BTC TVL but hit capital‑efficiency limits, prompting a pivot to loans with Lygos.