To illustrate an investor has a home in Switzerland and a seashore home in Miami. They’re value, maybe, $10 million. However what they’re actually searching for proper now could be a line of credit score for a while on the slopes at St. Moritz, a visit to the Cannes movie pageant and some upgrades to the yacht.
In conventional finance, they may have the ability to strategy their financial institution and use these belongings to safe a versatile, short-term mortgage. Nonetheless, if a considerable a part of the investor’s belongings is in crypto, it is possible a lot more durable.
And it appears there are a lot of ultra-rich individuals who made their fortunes in crypto. In 2025 alone, a survey by Henley & Companions discovered that the worldwide inhabitants of crypto millionaires had reached 241,700, up 40% from the earlier 12 months.
So how do these crypto-rich traders use their fortune to complement their lavish way of life? Their conventional financial institution possible will not even contact crypto, and if promoting these crypto belongings is out of the query, the place do they flip?
That is when a complicated decentralized finance (DeFi) lending methods comes into play, mentioned Jerome de Tychey, the founding father of Cometh, a DeFi-for-businesses facilitator that not too long ago turned one of many few companies in France to realize a Markets in Crypto Belongings (MiCA) license.
For somebody who’s crypto native, they might merely take their ether tokens, add them to a lending platform like Aave and withdraw stablecoins. Nonetheless, for somebody who made their fortune by simply shopping for crypto and watching it develop, and who is just not accustomed to the DeFi course of, it may be bewildering, de Tychey mentioned.
“That is nonetheless a bit too difficult and too refined for the layman, and so it’s usually the form of factor we do to assist household workplaces, for instance, who’ve quantity of crypto and desire a credit score line,” he mentioned in an interview on the CfC St Moritz crypto convention.
On a day-to-day foundation, rich shoppers usually use collateral loans, also called Lombard loans or Lombard credit score, to safe loans towards their belongings. These are versatile, short-term loans secured by the pledge of belongings corresponding to shares, bonds, or funding portfolios. They permit debtors to entry money shortly with out promoting their investments, thereby avoiding capital positive aspects tax and retaining advantages corresponding to dividends.
Sometimes, these shoppers have wealth within the tens or a whole lot of hundreds of thousands of {dollars}, and their goal is to maintain their belongings steady whereas funding their way of life and bills on the lowest charge attainable.
De Tychey, who can be the founding father of the Ethereum Group Convention (EthCC), mentioned his agency provides a DeFi element to the equation that would contain bitcoin on Aave, USDC on Morpho, or maybe offering liquidity on ether to BTC on Uniswap, for instance.
DeFi vs TradFi loans
Borrowing utilizing crypto belongings additionally presents perks, corresponding to a quicker lending course of. For instance, a mortgage backed by bitcoin could possibly be processed in as little as 30 seconds on some platforms, whereas a Lombard mortgage, utilizing conventional belongings as collateral, at a personal financial institution may take as much as 7 days.
Additionally, conventional loans require credit score checks and tax returns, whereas DeFi loans are permissionless (the place code is the regulation and it would not care who the borrower is in some platforms), so anonymity is an extra perk for individuals who search it.
It additionally has some drawbacks. For instance, crypto loans rely on counterparty threat and could possibly be extra risky relying on the worth of the crypto asset. For instance, if the worth of a digital asset out of the blue drops, the good contract or code may routinely liquidate a borrower’s collateral.
Nonetheless, all of it comes right down to utilizing an investor’s crypto asset to safe a mortgage via a quicker, extra seamless course of, moderately than going to a standard financial institution, the place crypto may not be thought-about an asset to borrow towards.
‘Tradfi-cation of DeFi’
Having snagged a MiCA license in France, Cometh can be engaged on methods to make use of DeFi methods for shares, bonds and derivatives utilizing their figuring out Worldwide Securities Identification Numbers (ISIN).
To entry debt utilizing an account holding Tesla shares, as an illustration, ISIN-based codes should be held in a devoted fund, de Tychey mentioned.
“We’re these kinds of approaches accomplished via devoted non-public debt merchandise that anybody with a title account can entry. In order that’s a approach of doing tokenization however the different approach round; it is actually a form of ‘tradfi-cation’ of DeFi,” de Tychey mentioned.