Bitcoin (BTC)-backed lending firm Lava lately claimed to have saved its customers “millions in interest costs” by refinancing their loans to rates of interest as little as “7% all-in for a full year.”
To a number of critics who’ve questioned the corporate over the previous few weeks, that declare was the straw that broke the camel’s again.
Jack Mallers of Strike, a BTC-backed competitor of Lava, printed a spreadsheet to debunk the declare.
In response to a buyer request to match Lava’s marketed 5% fee after Strike introduced a 9.5% fee for BTC-backed loans, Mallers defined the distinction between the 2 lenders.
First, he referred to as Lava “not a regulated financial institution,” not like Strike which has cash transmitter licenses (MTLs) within the overwhelming majority of US states.
In distinction, Lava has no MTL in any US state.
Mallers additionally questioned Lava founder Shehzan Maredia “aiming” to have “7% all-in” rates of interest for its BTC-backed loans.
“What is your actual pricing?” Mallers requested, in an try and decipher actuality from future steering.
Lava fails to reply one huge query
Mallers additionally detailed the official rates of interest of Strike versus Lava. On the finish of the primary month, Strike maintains a ten% efficient APR versus 35.2% at Lava.
For sure, 35.2% is kind of a bit greater than Maredia’s “aiming” to have “7% all-in” rates of interest.
Particularly, Lava presents customers a 5% two-week promotional fee, a 7% post-promotional fee, plus a 2% capital cost. In sum, the annualized rate of interest for a Lava consumer after one month is 35.2% by Mallers’ calculation — far above Maredia’s 7% “aiming.”
In reality, Mallers discovered that the efficient rate of interest for a $750,000 BTC-backed Lava mortgage wouldn’t fall under Strike’s 10% fee till a consumer held for longer than 9 months.
In the event that they’re custodial, how is what they’re doing authorized?
Strike has been buying licenses for years.
You possibly can’t simply “flip a switch” from non-custodial to custodial and begin providing brokerage, buying and selling, or lending providers. That’s unlicensed exercise and it’s very unlawful.…
— Jack Mallers (@jackmallers) November 6, 2025
Returning to the unique declare, Maredia tweeted that it’s someway saved customers “millions in interest costs” regardless of solely launching its mortgage product throughout the previous few weeks.
On condition that its one-month efficient APR appears to be greater than 35%, the easy math of this declare is troublesome to consider.
Certainly, Maredia’s “aim” to have “7% all-in” rates of interest for its BTC-backed loans doesn’t appear to reply one easy, mathematical query:
How has Lava saved its customers “millions in interest costs” inside a couple of weeks by refinancing them at annualized charges that might exceed 35%?
On social media, critics have requested Maredia to elucidate the disconnect between his 7% “aim” and the precise fee that Lava customers are paying by the top of their first month.
Maredia has declined to again down on his steering.
Protos has reached out to Lava for remark and can replace this piece if and after we obtain a reply.
