Frequently Asked Questions

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General FAQs
How does Valuete compare to other centralized crypto-backed lending platforms?

At Valuete our core focus has been on investor protection, security and legal clarity.
We use 2-of-3 multi-sig wallets for storing the loan collateral (Bitcoin) which offers incredible security benefits like hacking protection (internal and external) and elimination of re-hypothetication ( which caused the collapse of celsius and other centralized crypto lenders). With multi-sig wallets, customers' funds can never be put at risk which offers great peace of mind for investors.

On the other hand, We only work with loans denominated in US dollars that are secured by legal contracts which ensure strong investor protection and legal clarity.

What does “B2B” Marketplace mean?

On the Valuete marketplace, the borrowing takes place directly between a lender of interest and borrower of interest with Valuete simply acting as a platform for discovery. Valuete is not involved in loan organization or setting the terms of the loan, but offers tools to facilitate this process between borrowers and lenders seamlessly.

How does Valuete offer better security?

The Valuete model relies on using 2-of-3 multi-signature wallets for storing Bitcoin which is used as collateral for securing the loan originated between borrower and lender. As mentioned previously this offers far better protection from hacking and re-hypothetication.

**Refer Security section for more details.

What is a Multi-Sig wallet?

A Multi-Signature, or Multi-Sig, bitcoin wallet typically has 2 or more joint account owners, Now, Out of these say 3 co-owners we can set a threshold of say 2 co-owners as the requirement to process any transactions.

This incredible innovation improves security by orders of magnitude if designed properly with hard wallets.

How are Multi-Sig wallets better than the centralized wallets used by other platforms?

Using a Multi-Sig wallet provides a level of security and legal clarity currently not offered by any other bitcoin lending platform. Valuete model offers not only incredible security but also offers legal clarity which is currently not available in the most crypto lending platforms. The lack of legal clarity restricts most of money available in the US banks from entering Bitcoin backing lending.

What fees does Valuete charge?

Valuete has individual and enterprise plans with different structures to ensure smoother operation of the platform

Our fees are much lesser compared to other platforms as we don’t have huge overhead costs of running a centralized crypto lending platform, which we pass on as benefits in form of lower fees.

Why are you a Bitcoin-only platform?

Valuete is focused on offering a high level of security and legal clarity for all the products and services we offer; we believe only Bitcoin meets the high bar we have set. By being a Bitcoin-only platform, we can focus our energies on offering a high-quality product to our customers instead of fighting legal battles with SEC and other agencies. Not to mention, over the long term, we believe 95% of alt-coins will no longer exist.

What determines the interest rate for my loan?

The Valuete Marketplace allows for competitive market-rates terms by matchmaking ready-and-willing Lenders with receptive Borrowers. Interest rates (APY) will vary based on the duration of the loan, the initial LTV (value of bitcoin collateral pledged), and loan type and as such is determined by supply and demand for credit. Contact your valuete Account manager for more details.

Do I need to buy my own multi-sig wallet?

Multi-sig wallets are generated when 2 or more regular wallets are combined and as such are not sold separately per se. Any regular hardware wallet like a ledger or trezor can help you create multi-sig wallet addresses. Contact your Valuete Account Manager for onboarding.

Security FAQs

Security is the most important for digital assets like bitcoin as they have some of highest flight risk of all assets in human history.

Gold worth $100 Million weighes more than 1 ton and would raise lot of alarm bells to move around where as Bitcoin worth billions could be move across borders and jurisdictions seamlessly . As such, The security profile of Bitcoin is much different compared to heavy metals like gold.

Thankfully multi-sig wallets make the job of securing Bitcoin significantly easier, and are an incredibly tool for vastly improving security by orders of magnitude.

Let’s divide security risks into internal and external risks. Internal risks include loss of private keys and collusion. External risks include hacking by bad actors.

What happens if I lose access to my private keys?

Loss of private keys can be practically eliminated by keeping a copy of the 24-word seed safely in a secure location. However, in the extreme event of losing access to your private key, you can request the company ( Valuete ) to take part in the singing event instead of you for asmall facilitation fee.

What happens if my private keys gets hacked?

Using standalone hardware wallets for storing bitcoin is considered a fairly secure process, as hardware wallets like ledger or trezor have no known significant vulnerabilities at this time. The primary possibility is a physical attacks ( like a burglarly ) which can be avoided by keeping the hardware wallet in a secure location . This practise is in fact enforced through the contracts that you sign which should ensure that your keys are not stolen.
In an extremely unlikely of hacking, since the collateral is placed on a 2-of-3 Multi-sig wallet, successful hacking of funds needs access to 2 private keys, not just one, so this makes hacking of Bitcoin incredibly difficult to pull off and so makes it incredibly unappetizing for potential hacker/ attackers. Now, compare this to hacking a centralized custodian who has full access to digital access worth billions, its will be impossible for any security company to withstand an attack from determined hackers when the prize is in billions.

What happens in case of insider collusion i.e Valuete and Lender or Valuete and Borrower collude to cheat the other party?

Any insider collusion and defrauding of parties is completely illegal and the erring parties will be subject to legal action.
Having said that, incentives are misaligned for insider collusion with a multi-sig configuration, unlike a centralized custodian where the custodian can run off with billions of dollars to a US adversarial jurisdiction and escape legal accountability.
Now, Let's say the borrower colludes with valuete and tries to defraud the lender, in this case the bitcoin would be moved from multi-sig wallet to the wallet controlled by borrower. Owing to an interesting transparency property of multi-sig wallet,every multi-sig transaction carries a signature which can used to figure which parties were actually involved in a transaction, with this its can be easily proven to the court that it was the borrower and Valuete keys that were involved in the transaction. Lenders can now sue the borrower and Valuete for breach of contract and in most case claims damages plus the pending amount.
Lets reverse the roles and say its Lender and Valuete who collude to defraud borrower, the borrower will sue Valuete and lender by proving their guilt from the transaction signature and claim settlement and damages.
If Valuete were to be involved in any illegal activity like this, the directors or employees involved would not only be thrown in jail, the company loses credibility and will lose all customers ( other lenders and borrowers ) who can simply close their loans and move bitcoin from multi-sig wallets back to original owners.

What are the various security measures Valuete employs?

Valuete has a robust security infrastructure in place to provide protection for both borrowers and lenders.

  • ISO/IEC 27001 Certification
  • Community Driven Vulnerability Disclosure & Bug Bounty Program
  • 24/7 Security Operations Centres (SOC)
  • Immutable audit trails, backups, and retention
  • Strong Access Controls, Advanced Data Protection and Crypto Protocols
  • Ongoing Risk Assessment, Threat mapping & Auditing
  • Insurance for third-party theft of private keys in a physical breach of a hardware security module (HSM)

With these layers of Lender protection and pre-set LTV limit triggers on over-collateralized Bitcoin holdings, your loan is nearly free from default and custodial risk.

How does Valuete ensure that a multisig wallet deposit address is genuine and not manipulated on front-end?

Using a simple electrum bitcoin wallet, you can create and check the authenticity of a multi-sig address generated. Simply enter the 3 public keys and select the 2-of-3 option, the electrum wallet generates a multi-sig with a lot of deposit addresses. The first address is the one that's picked for collateral deposited in our system.
Since the 2-o-f-3 multi-sig wallet address needs atleast 2 signs to move funds, you can be sure of its authenticity ( not manipulated on the front-end ) provided you as a borrower were able to generate the same address with our public key which is widely available on our various social media handles etc
Check this video on how to verify the authenticity through the step-by-step guide

It is worth pointing out that this level of security and transparency are not offered by any other crypto platform, front-end manipulation of deposit addresses is not covered by any crypto exchanges at all.

Does Valuete insure my bitcoin?

Valuete doesn't offer insurance for theft of funds if the keys of the Lender and borrower are involved, We however offer insurance protection for misuse of our key by bad actors as an add-on.

The fact of the matter is even though a lot of centralized custodians claim they have ‘ insurance coverage’ the coverage ratio is very low i.e most exchanges/lenders do not have adequate coverage to cover the full value of assets they hold, which means in case of a large hacking event, the coverage simply won't be sufficient.

For this reason, we believe it's much better to use a mutli-sig wallet set-up which offers an order of magnitude more security than a centralized custodian with inadequate insurance coverage.

Liquidation FAQs
when is a liquidation triggered?

Liquidation is the event of selling collateral ( bitcoin ) to repay some or all of the outstanding debt. Liquidation is triggered only after the borrower misses the liquidation notifications being sent before the Collateral to loan ration ( CTL) hits a liquidation ratio set by the lender.

For example: lets say you borrowed $100,000 against a collateral of $200k worth bitcoin with bitcoin price at $20,000. Now lets say Bitcoin price goes down and hits $15,000 , Now the CTL is 150% which is a typical ratio when you as a borrower will recieve alerts from lender to post most collateral ( bitcoin ) so as to bring the CTL ratio back to 200%. However incase borrower fails to post more collateral and the CTL hits 120% which is a typical liquidation ratio, the lender reserves the right the trigger forced liquidation.

How is a liquidation executed?

Liquidation is only triggered if Collateral to loan ration - CTL falls to specified ratio ( typically 110-120 % ) as per the loan agreement and if the borrower doesnt respond to the final margin notice from lender with the set time period ( typically 1 hour ).

Once lender decides to go ahead with liquidation ( after the final margin notice is unmet by borrrower ) , the lender goes ahead and signs a transaction with their private key and shares a partially signed bitcoin transaction file or PSBT file with borrower. The borrower needs to sigh this PSBT file with their private key and complete the transaction.

Ignoring this request from lender by the borrower is considered a serious breach of contract and results in fines and blacklisting by Valuete.

Incase the borrower doesnt respond to the final notice in 1 hour as specified in the contract , the 3rd key or valuete key will be used in completing the transaction.

Other FAQs
What is Valuete’s blacklist policy?

Valuete respects the rule of law in both spirit and letter, we abide by agreements set between lenders and borrowers. Any serious breach of the contracts set between lender and borrower will result in the blacklisting of the erring party from the platform ranging from 1 year ( for a minor offence) to life ( for a major offence) apart from any penalties imposed.

How are user ratings calculated?

We follow a ‘uber like’ ratings policy where both parties rate each other. Once the loan is closed i.e Loan amount paid by the borrower and bitcoin returned to the borrower, both lender and borrower are offered a chance to rate their counter-party which helps both parties build credibility on the platform. The User Ratings help in faster future loan approvals for borrowers and faster acceptance for lenders.

Does Valuete help resolve disputes between borrowers and lenders?

Valuete doesn't have any material information that is of particular help in resolving disputes that isn't already available with either parties per se. The official policy of Valuete is neutrality and we do not pick sides in disputes. We request the concerning party to resolve the disputes amicably and incase of serious disputes we request the concerned parties to resolve them in a court of a law.

How does Valuete ensure compliance with KYC (“Know Your Customer”) and AML (“Anti-Money Laundering”) regulations?

Valuete follows KYC norms for all the customers on the platform, business customers will need to submit additional documents as requested by the platform. The lenders on the platform could demand additional documents for their own KYC and AML checks as part of the loan agreements in alignment with both federal and state law which will be disclosed to borrowers.