Base Build

Bitcoin's first block carried a headline about bailing out the banks. Seventeen years later, crypto has barely touched the thing banks mainly do: lending. I think it's the biggest opportunity in crypto. Here are 10 ideas. 1. A bank with instant liquidity that can't have a run. Your deposit in the bank is a token that earns interest every day. If you want your money back, you send the token back to the bank and it repays you after 60 days. In the meantime, if you need cash sooner, you can sell your deposit token on the open market. If people panic, the token's price drops in the market but the bank keeps its funding. 2. A bank for new cities. In 1865, when Hong Kong was still tiny, local merchants set up HSBC to finance its trade, and it's now one of the biggest banks in the world. A new city's biggest asset is how much its land will be worth once people move in, so a bank that lends to its first builders against that rise in value could grow with the city. I heard Kazakhstan is interesting... 3. A dollar bank for the world. In the 1960s, the US put limits on deposit interest, which helped push dollars to London, where banks could pay more interest. Today stablecoins can't pay any interest at all, and about $300B sits in them earning nothing for the people who hold it. An international bank that pays interest on digital dollars to people anywhere could grow extremely fast. 4. Loans that repay themselves. Build lending directly into the wallet or payment app a business already uses, and take a fixed share of every payment it receives, say 10%, until the loan is paid off. Square already does this with card sales. Stablecoins would let this work anywhere in the world. 5. A lender that can see everything. Archegos borrowed from several banks at once to make huge bets on a handful of shares, and each bank only saw its own slice. When the shares fell in 2021, Credit Suisse alone lost $5.5B (and two years later had to be rescued by my old bank, UBS). If you only lend to businesses that are 100% onchain, the borrower can prove everything it holds and you can check the risk every few seconds. Good examples would be decentralised exchanges, DeFi protocols and onchain market makers. 6. A lender of last resort for crypto. In a panic, even solvent firms can run out of cash. In 1873 Walter Bagehot argued that in a panic the Bank of England should lend freely and at a high rate to anyone with good security. It's also good business: the US made $23B from rescuing AIG in 2008. Crypto has nobody to play that role. A fund could sell exchanges, stablecoins and DeFi protocols an emergency credit line for a small yearly fee, then lend at a high rate when markets freeze. It would earn money in calm times and in crises. 7. Structured finance with 100% transparency. In 2008 investors bought bundles of loans they couldn't see inside. If every loan sits onchain with each repayment visible, the lender can keep the riskiest, highest-yielding share and sell the rest to investors who can check every loan themselves (or, more realistically, have their agents check). 8. A credit card for AI agents. An AI agent can't pass a credit check, but if it's paid onchain, you can see everything it earns. You could give it a credit line that it can only spend on computing power, inference and data, and that gets paid back automatically from its income. 9. The ten-person bank. Most big banks are hundreds of smaller banks merged together over decades, and many of the old back office systems are still running. They are extremely inefficient: the average US mortgage lender spends about $11,000 to approve a single loan, and banks spend even more. A bank built from scratch, with AI checking borrowers, collecting payments and handling compliance, could run with a tiny team and very high margins. 10. Lending to the frontier. The 19th century merchant banks made their fortunes financing railways and canals. Today a handful of private credit funds do the same for AI data centres, biotech and the odd space company. Put those loans onchain and anyone in the world could help fund the frontier. None of these are easy and most would need a banking licence, but if you can pull one off...