Risk statement

The specific risk, not the generic one

One of the loans on this platform is in default. It is Bloxers Health Data Inc., a 720 BSV loan graded C, and the borrower has made no scheduled payment since June 2026. The indicative recovery discussed in arbitration is 180–240 BSV before costs, so lenders on that loan are looking at getting back somewhere between a quarter and a third of what they lent.

That is 4.5% of all principal ever lent through this platform. A second loan is late. Both records stay published, including the credit note that graded the defaulted one too generously and the reviewer’s own written account of why.

What can go wrong

The borrower stops paying

The main risk, and the one everything else is downstream of. Small businesses fail for ordinary reasons: a customer leaves, a regulator says no, a harvest comes in short, an installer schedule slips. Every listing has a risks tab and it is not decorative: read it before the story.

The collateral turns out to be worth nothing

“Secured” is not a synonym for “safe”. A first charge over bonded stock in a warehouse is worth close to its book value in a workout. A charge over a bespoke injection-moulding tool for one product’s case is worth scrap if the product stops selling, and a charge over a software repository is usually worth less than the cost of enforcing it. The listings say which is which and you should read them literally.

You cannot get out

There is no early redemption as of right. You may list a position for transfer and BitBacker does not guarantee a buyer: on a thirty-six month loan you should assume there will not be one. Money lent here is committed for the term.

The credit note is wrong

Grades are a judgement by a named person, not a measurement. The reviewer who graded the defaulted loan wrote afterwards that they had treated a substantive regulatory question as a procedural one and were wrong by a whole category. That will happen again.

The price of BSV moves, on one leg of two

The coupon is paid in a dollar stablecoin and fixed at the rate on the day the loan drew down, so a move in the price does not change what your interest pays. Your principal is a different matter: on a BSV-denominated loan it comes back as BSV, and if you think in dollars its value moves with the price. A 12% coupon does not protect you from a larger move in the other direction on the principal it was earned against.

The stablecoin is its own risk and a smaller one, but not nothing. MNEE is redeemable one-for-one against a dollar and collateralised in US T-bills and cash by a licensed issuer. That is a claim on an issuer rather than a dollar in a bank you chose, and every stablecoin that has ever broken its peg was fully backed on the morning it did.

The borrower is short BSV, and you are not

The mismatch runs both ways and the half above is the lender’s half. A business that draws its principal in BSV owes BSV, and its revenue is in euros, dollars or pounds. If the price doubles, the dollar cost of every remaining instalment doubles while the shop, the print run or the co-operative contract earns exactly what it earned before. That is a default cause, and it is one that has nothing to do with whether the business is any good.

Which is why most of this book is drawn in a stablecoin instead, and why the loans that are not are the ones whose receipts are in BSV too. Every BSV-denominated listing carries a control that shows you what a move does to both sides of it.

The reserve

BitBacker charges a 5% origination fee on every loan. Two percentage points of principal — two fifths of that fee — go into a reserve rather than to the platform, and are paid to lenders before they take a loss. It currently holds $9,860.

That is 44% of the principal presently in default. It is not insurance, it is not a guarantee, and it is deliberately not large enough to be mistaken for either: a buffer that could absorb every loss would have to be funded by a fee nobody would pay and regulated as something this is not. It is a first slice, and the number is published so you can see how thin a slice it is.

The platform

BitBacker administers the loans, holds the security and runs the arbitration. If it failed, enforcement of the charges it holds on your behalf would be slower, more expensive and less certain than the listings imply.

How to lend less badly

• Spread across several loans. A single position in a C-grade loan is the most common way to lose money here.
• Size every position as money you can lose entirely, because that is the outcome the defaulted loan produced for the people in it.
• Match the term to your own horizon. There is no exit.
• Read the grade before the rate. The highest coupon on the platform is attached to the thinnest revenue base, and that is not an accident.

This is not advice

Nothing on BitBacker is investment advice, a personal recommendation, or an offer or solicitation in any jurisdiction where that would be unlawful. Credit notes are the opinion of the named reviewer. Figures marked as projected are projections and have not happened.