How Unchained Capital works

What is Unchained Capital

Unchained Capital is a financial services company that specializes in providing secured loans backed by Bitcoin and other cryptocurrencies. It offers solutions for long-term cryptocurrency holders who may not want to sell their assets but need access to liquidity for various purposes, such as business operations, investments, or personal expenses.

Unchained Capital’s primary service is called “Bitcoin-backed loans.” Customers can deposit their Bitcoin as collateral and receive a loan in USD or stablecoins, with the amount determined by the value of the collateralized Bitcoin.

The loans are typically structured as multi-signature wallets, where the borrower and Unchained Capital hold keys, providing added security and mitigating counterparty risk.

Unchained Capital also offers a “vault” service, which provides a multi-signature storage solution for Bitcoin holders who want to store their cryptocurrency securely. The vault service is designed to protect against theft, loss, and other risks associated with self-custody of Bitcoin.

In addition to its loan and vault services,

Unchained Capital also provides educational resources and content related to Bitcoin, blockchain technology, and financial sovereignty, aiming to help individuals and businesses understand and navigate the world of cryptocurrency and decentralized finance (DeFi).

It’s important to note that financial regulations and requirements may vary depending on the jurisdiction, and borrowers should carefully review the terms and conditions of any loan agreement or service offered by Unchained Capital, or any other similar financial service provider, before engaging in any transactions.

The history of Unchained Capital

Unchained Capital was founded in 2016 by Joe Kelly and Dhruv Bansal, who aimed to provide financial services that would help Bitcoin holders unlock the value of their cryptocurrency without needing to sell it. The company’s mission was to enable long-term Bitcoin holders to access liquidity while maintaining ownership and control of their Bitcoin.

The founders recognized that many Bitcoin holders faced challenges in accessing traditional financing due to the unique nature of cryptocurrency as an asset. Banks and traditional lenders often did not understand or accept Bitcoin as collateral, and selling Bitcoin could trigger tax events or result in missed opportunities for future price appreciation.

With this in mind, Unchained Capital developed a solution to provide Bitcoin-backed loans, allowing borrowers to deposit Bitcoin as collateral and receive a loan in USD or stablecoins. The loans are structured as multi-signature wallets, where the borrower and Unchained Capital hold keys, providing a secure and transparent lending solution.

Since its founding, Unchained Capital has grown and evolved its services. In addition to its Bitcoin-backed loan offering, the company introduced a vault service to provide secure multi-signature storage for Bitcoin holders who wish to store their cryptocurrency safely. The vault service aims to address concerns around theft, loss, and security associated with self-custody of Bitcoin.

Unchained Capital has also been active in providing educational resources and content related to Bitcoin, blockchain technology, and financial sovereignty. The company publishes articles, hosts webinars, and participates in industry events to help individuals and businesses better understand and navigate the world of cryptocurrency and decentralized finance.

As of 2023, Unchained Capital continues to operate as a leading financial services provider in the cryptocurrency space, serving Bitcoin holders who seek access to liquidity while maintaining ownership and control of their digital assets.

How Unchained Capital works

Unchained Capital operates as a financial services company that provides Bitcoin-backed loans and secure storage solutions for Bitcoin holders. Here’s an overview of how Unchained Capital works:

1. Bitcoin-Backed Loans: Unchained Capital allows Bitcoin holders to deposit their Bitcoin as collateral and receive a loan in USD or stablecoins. The borrower’s Bitcoin is stored in a multi-signature wallet, where the borrower and Unchained Capital both hold keys. The loan amount is determined by the value of the collateralized Bitcoin, and the borrower can use the loan proceeds for various purposes, such as business operations, investments, or personal expenses. Interest rates, loan terms, and other conditions are agreed upon between the borrower and Unchained Capital.
2. Secure Storage (Vault): Unchained Capital offers a vault service that provides secure multi-signature storage for Bitcoin holders who want to store their cryptocurrency safely. The vault is designed to protect against theft, loss, and other risks associated with self-custody of Bitcoin. The vault uses a multi-signature setup where the customer and Unchained Capital both hold keys, providing added security and reducing counterparty risk.
3. Loan Repayment and Collateral Release: During the loan term, the borrower makes regular loan payments, including interest and principal, as agreed upon in the loan agreement. Once the loan is repaid in full, the borrower’s Bitcoin collateral is released back to them. If the borrower defaults on the loan, Unchained Capital may take possession of the Bitcoin collateral and sell it to recover the outstanding loan amount.
4. Educational Resources: Unchained Capital provides educational resources and content related to Bitcoin, blockchain technology, and financial sovereignty. This includes articles, webinars, and industry events aimed at helping individuals and businesses better understand and navigate the world of cryptocurrency and decentralized finance.
5. Compliance and Regulation: Unchained Capital operates in compliance with applicable laws and regulations, including anti-money laundering (AML) and know-your-customer (KYC) requirements. Borrowers are typically required to undergo identity verification and other checks as part of the loan application process.

It’s important to note that the specific details of how Unchained Capital operates may vary depending on the jurisdiction and the terms and conditions of the loan agreement or service being used. Borrowers should carefully review and understand the terms and conditions of any loan or service offered by Unchained Capital, or any other similar financial service provider, before engaging in any transactions.

Can Unchained Capital be trusted

Unchained Capital is a well-known and reputable financial services company in the cryptocurrency space, and it has been operating since 2016. The company has a strong focus on security, using multi-signature wallets and other measures to protect the Bitcoin collateral and customer funds. It also complies with applicable laws and regulations, including AML and KYC requirements.

Unchained Capital has received positive feedback from customers and partners, and it has been featured in various media outlets. However, like any financial service provider, it is important to thoroughly research and assess a company’s offerings, terms and conditions, and reputation before engaging in any transactions.

When considering using Unchained Capital or any other financial service provider, it is recommended to:

1. Review the company’s terms and conditions, including interest rates, loan terms, collateral requirements, and repayment terms.
2. Understand the risks associated with cryptocurrency-backed loans, including the potential for loss of collateral if loan payments are not made as agreed.
3. Assess the company’s security measures, such as multi-signature wallets, and understand how customer funds and collateral are protected.
4. Research the company’s reputation, customer reviews, and track record in the industry.
5. Consider seeking professional financial advice to ensure that the service aligns with your financial goals and risk tolerance.

It’s also advisable to be cautious with any financial service involving cryptocurrency, as the regulatory landscape is still evolving, and risks associated with the volatility and complexity of cryptocurrencies should be carefully considered.

Does Unchained Capital charge a fee

Yes, Unchained Capital charges fees for its services, which may vary depending on the specific product or service being utilized. Here are some common fees associated with Unchained Capital’s offerings:

1. Loan Origination Fee: Unchained Capital may charge an origination fee when a borrower takes out a Bitcoin-backed loan. The origination fee is typically a percentage of the loan amount and is charged upfront when the loan is originated. The specific percentage may vary depending on the loan amount and other factors.
2. Interest Rate: Unchained Capital charges interest on Bitcoin-backed loans, which is calculated based on the loan amount, the term of the loan, and the interest rate agreed upon in the loan agreement. The interest rate is typically expressed as an annual percentage rate (APR) and is charged over the duration of the loan.
3. Storage Fee: Unchained Capital charges a storage fee for its vault service, which provides secure storage for Bitcoin. The storage fee is typically calculated as a percentage of the value of the stored Bitcoin and is charged periodically, such as monthly or annually.

It’s important to carefully review and understand the fees associated with Unchained Capital’s services, as they can impact the overall cost of using their products.

It’s recommended to thoroughly review the terms and conditions, including the fees, before engaging in any transactions with Unchained Capital or any other financial service provider, and to consider seeking professional financial advice if needed.

How to use Unchained Capital

Using Unchained Capital typically involves several steps, which may vary depending on the specific product or service you are interested in. Here is a general overview of how you can use Unchained Capital:

1. Choose a Service: Unchained Capital offers various services, such as Bitcoin-backed loans, multi-signature vaults for secure Bitcoin storage, and collaborative custody for businesses. Determine which service aligns with your needs and financial goals.
2. Create an Account: If you are a new user, you will need to create an account with Unchained Capital. This typically involves providing personal information, completing any necessary KYC (Know Your Customer) requirements, and agreeing to the terms and conditions of the service.
3. Apply for a Loan (if applicable): If you are interested in a Bitcoin-backed loan, you will need to apply for a loan with Unchained Capital. This typically involves submitting an application form, providing information about the Bitcoin you plan to use as collateral, and undergoing a credit check. If approved, you will receive loan terms, including the loan amount, interest rate, and loan duration.
4. Complete Loan Agreement: If you are approved for a Bitcoin-backed loan, you will need to review and sign a loan agreement with Unchained Capital. This agreement will outline the terms and conditions of the loan, including the repayment schedule, interest rate, and any fees associated with the loan.
5. Transfer Collateral (if applicable): If you are using Bitcoin as collateral for a loan, you will need to transfer the agreed-upon amount of Bitcoin to the designated multi-signature wallet or custody solution provided by Unchained Capital.
6. Repay Loan (if applicable): If you have taken out a Bitcoin-backed loan, you will need to make loan payments according to the agreed-upon repayment schedule, including paying the principal amount, interest, and any fees as outlined in the loan agreement.
7. Manage Vault or Collaborative Custody (if applicable): If you are using Unchained Capital’s vault service or collaborative custody for businesses, you will need to manage your Bitcoin holdings accordingly, following the instructions and guidelines provided by Unchained Capital for accessing and securing your Bitcoin.

It’s important to carefully review and understand the specific steps and requirements associated with the Unchained Capital service you are interested in, as they may have their own unique processes and procedures. It’s also recommended to thoroughly review the terms and conditions, including any fees, and seek professional financial advice if needed before engaging in any transactions with Unchained Capital or any other financial service provider.