Firefish — a decentralized lending platform that works with Bitcoin collateral. The project allows users to access fiat or stablecoins without the need to sell BTC, keeping control of the asset through a secure multisignature system. Firefish eliminates intermediaries and fully automates the loan application and servicing process. The platform is focused on transparency, security, and sustainable profitability for both borrowers and investors. The system supports various currencies, including euros, Czech koruna, and USDC, making it convenient for the European market. The project has already received support from major investors and is actively developing, expanding its functionality and user base.
- Firefish Project Overview
- Lending Mechanism
- Firefish's Technological Architecture and Security
- Firefish's Benefits and Risks
- Ecosystem, Tokens, and Project Development
- Conclusion
Firefish Project Overview
Firefish is a decentralized lending protocol designed to simplify access to liquidity without requiring users to sell their Bitcoin assets. Unlike centralized lending services, the platform operates fully peer-to-peer, without holding user funds or controlling the platform. It is based on open-source code and aims to provide maximum transparency between participants.
A borrower publishes a loan request with parameters such as currency, amount, term, and interest rate. The investor analyzes available offers and selects the one they prefer. Once both parties agree, a multisignature wallet is created on the Bitcoin network, where the borrower deposits BTC as collateral. The investor's liquidity is transferred in the selected currency. All transactions are automatically regulated by the protocol, avoiding human errors and fraud.
An important difference of Firefish from other solutions is the focus on Bitcoin as the primary asset. This makes the platform especially attractive to BTC holders who wish to preserve their long-term positions while gaining short-term liquidity.
Lending Mechanism
Firefish offers a user-friendly yet flexible mechanism, suitable for both experienced DeFi participants and newcomers. Participation in the system requires a simple verification process, after which the user can access the full functionality of the platform. The system operates on offers created by users — borrowers create requests, and investors select suitable options and participate in deals.
After registration, the borrower specifies the loan parameters: desired amount, currency type, term, and interest rate. The offer then enters the general pool, where it can be viewed by all registered investors. Once one of the parties agrees to the terms, a unique contract is created and regulated by the Firefish protocol.
Main steps of lending:
- The borrower creates an offer with parameters.
- The investor accepts the offer and transfers funds.
- The borrower deposits BTC in a multisignature wallet.
- Upon receiving liquidity, the borrower uses it within the specified term.
- The borrower repays the loan with interest and retrieves BTC.
The platform supports several fiat and digital currencies available for use in transactions. This allows it to cater to a wide range of users with different preferences.
Available currencies:
- Euros (EUR)
- Czech koruna (CZK)
- Stablecoin USDC
The division into borrower and investor roles simplifies navigation on the platform and makes the interface intuitive. Firefish strives to maintain a transparent and easy-to-understand user experience. Both parties in the deal gain a clear understanding of their obligations, and the automated protocol logic ensures that all terms are followed. This creates a high level of trust, which is especially important when interacting with unfamiliar participants in the network.
Firefish's Technological Architecture and Security
Firefish is built on the Bitcoin network and uses its own protocol without third-party smart contracts or other blockchains. This provides a reliable and verifiable infrastructure fully compatible with the principles of decentralization. The platform implements a multisignature wallet system and interacts with the Bitcoin network directly, without bridges or centralized points of failure.
Before funds enter the transaction, a multisignature wallet is created with key distribution between the participants and the platform. All transactions related to collateral are recorded on the main BTC network. Firefish uses PSBT (Partially Signed Bitcoin Transactions) and the MuSig2 scheme, allowing for flexible and secure signature processing.
Key technological elements:
| Component | Description |
|---|---|
| Multisig Wallets | A wallet with three keys: one with the borrower, one with the investor, and one with Firefish |
| Bitcoin Blockchain | All transactions are recorded only in the BTC network, with no third-party blockchains |
| Firefish Protocol | Responsible for managing transaction logic and verifying the execution of terms |
| PSBT & MuSig2 | Used for creating and coordinating transaction signatures |
This approach makes it impossible to withdraw collateral arbitrarily by any party without the consent of at least two participants. This eliminates the need to trust a third party and simultaneously protects the investor from losing funds in case of borrower misconduct. An additional level of protection is that Firefish never stores user funds, only participating in the control of protocol execution. This ensures security at all stages of interaction with the platform.
Firefish Benefits and Risks
Firefish offers a balanced approach to lending, combining transparent terms, reliable collateral, and the absence of intermediaries. Users gain real liquidity without losing the potential growth of their BTC portfolio. This approach is particularly valued in a volatile market.
The protocol is designed for long-term use and is suitable for both short-term loans and investment planning. Before starting to use the platform, it is important to understand both the strengths and weaknesses associated with its application.
Firefish Benefits:
- Access to liquidity without selling BTC;
- Multisignature mechanism for collateral protection;
- Absence of intermediaries and custodial risks;
- Transparency of all operations via the blockchain.
However, the platform requires discipline and an understanding of risks. Cryptocurrency volatility can lead to a situation where the collateral value decreases significantly, potentially resulting in forced liquidation. Additionally, if the borrower fails to meet obligations on time, they risk losing their collateral.
The platform ensures maximum transparency, but responsibility for actions lies solely with the users. Participation in the protocol requires careful attention to deadlines, amounts, and the current BTC rate.
Ecosystem, Tokens, and Project Development
Firefish does not currently use NFTs or its own token. The main focus is on stability, model clarity, and compliance with legal standards. All operations are conducted in BTC, EUR, CZK, and USDC, making the platform more oriented towards real economic needs rather than speculative value.
In April 2025, Firefish successfully raised $1.8 million in seed funding. The main investor was Braiins, known for the Slush Pool mining pool. The funds will be used for expanding the team, launching a mobile app, and scaling to other EU countries.
The project team is actively working in the Czech Republic and is also focused on integrating with European banks to simplify deposits/withdrawals. Although the project is based on Bitcoin, there are plans to explore cross-chain interactions and potential support for other digital assets.
Firefish follows the trend of transparent and legally compliant DeFi, creating a model capable of existing and evolving not only in the Web3 space but also in the real economy.
Conclusion
Firefish demonstrates a new model of decentralized lending where users maintain control over their assets and transact directly with each other. The protocol is based on reliable Bitcoin network technologies and eliminates custodial risks. The multisignature model, transaction transparency, and absence of intermediaries make the platform secure and fair. Despite some limitations and risks, Firefish provides a real opportunity to effectively use BTC as collateral. With proper management of loans, users can access liquidity without losing their cryptocurrency holdings. All of this makes the platform relevant for the market both today and in the future.
