Aaron Tilton, CEO of SmartFi, opened his talk at Mining Disrupt Miami 2022 by playing a metal track to wake the room at the end of the day. The song was Breaking Benjamin's "Simple Design", and he picked it on purpose. Lending, he told the audience, is not complicated. The lenders that had just failed, he said, made it complicated, and the results were not very good.
The session was recorded at Mining Disrupt Miami 2022, held July 26–28, 2022, when Bitcoin traded at $21,268. Tilton named Celsius and Three Arrows Capital as part of what he called the last debacle. SmartFi had been a counterparty to some of those firms in trading, he said, but it did not take the risk they took and had no issues during the collapse. The rest of the talk explained why.
SmartFi started lending in the space years earlier, and its first customers were miners, in Europe, Asia, South America, the United States and Canada. Tilton said the company saw early on that liquidity would become the hard part, and it built its structure around a token that funds its loans and carries a buyback guarantee.
Growing Too Fast: The Celsius Example
Tilton described the failures as a mix of too much risk and excessive growth. He used Celsius as the example. When SmartFi was doing lending projects in 2018, he said, Celsius was about the same size. By his account, Celsius then grew to a peak asset value of 20 billion dollars in about 36 months.
it's a confluence of too much risk right and excessive um growth so when you think about is it ever a bad thing to grow too fast yeah definitely
Aaron Tilton · 2:26
The problem with that size, he said, shows up when a lender against Bitcoin needs to stop out risk while the price is falling. There is no buyer large enough to take that position, so the book starts going negative.
where do you go to sell 20 billion dollars worth of bitcoin to stop out the risk there is nobody that'll take that
Aaron Tilton · 3:21
He tied this to hedging. Taking in assets is one thing, he said, but a lender also has to be able to form a hedge that gets it to exactly zero if everything goes bad, not below and not above. That is what a lender cannot do once it is too big, and at that point it starts putting assets in risky places.
Too Good to Be True
SmartFi priced its own rates against Celsius and other groups, Tilton said, and Celsius was always marking about two percent above everybody else on its coin interest accounts. To keep paying that, it had to move the assets it took in into riskier and riskier propositions, including DeFi and Luna. He said it started to become a little bit like a Ponzi scheme.
above everybody else when they were paying out their coin interest accounts so when they as they took in those assets they had to go to riskier and riskier propositions
Aaron Tilton · 3:57
if a promised return is too good to be true it's too good to be true right 19 20 rates coming from luna
Aaron Tilton · 5:01
His point was that a promised return that is too good to be true is exactly that. Somebody giving away a 20 percent annualized return on a software project, he said, means something is wrong. He added that people would keep having to relearn this.
SmartFi was approached often by projects asking it to put its assets on their DeFi platforms, and it said no because it could not quantify the risk or did not have the liquidity to stop it out. Some customers in the room, he said, had those exact conversations with SmartFi, were told no, and took their assets elsewhere. He did not know what happened to those assets. SmartFi, he said, is still making loans because it does not chase excessive returns, and other lenders that managed their risk and stayed off leverage are still there as well.
A Tow Truck and Real-World Collateral
The difference, as Tilton framed it, is where the money goes. Some DeFi protocols took deposits the way a bank does, but put the assets into trading strategies built on the idea that high-frequency trading was sustainable. A protocol, he argued, has no way to slow the train down when it starts to come off the tracks.
SmartFi lends from crypto into the real world. At times about one-third of its portfolio was in real estate and equipment loans, a line it started the year before. He then asked the room a question about the weeks when the market came apart.
know coming off the rails six weeks ago did the guy that borrowed the money for his tow truck still show up to work the next morning
Aaron Tilton · 8:37
His answer was yes. The borrower still towed cars and still had cash flow. A real-world business, Tilton said, cannot go from zero to 20 billion dollars in 36 months, but it also does not go from wherever it is to zero in two weeks. He came back to the song: safety first, and a simpler design.
How the Buyback Guarantee Works
Tilton said the buyback guarantee is almost too hard to sell, because people assume it is too good to be true while they will chase a 20 percent annualized return and believe it. He compared it to a bank deposit, where the customer expects to get back exactly what they put in.
A buyer's token funds SmartFi's loans. The token can rise in value, but if it falls below the price paid, the holder can bring it back after a one-year lock-up and SmartFi will buy it back at the original purchase price.
for you bring it back to us after a year right there's a lock-up period in that part but after a year you bring it back to us
Aaron Tilton · 9:56
He said SmartFi can do this because it is not spending on Ferraris or funding its software by raising a token. It makes loans the way a bank does and requires the right amount of collateral. He described it as combining what works in fiat banking with what works in crypto, and added that most people move from the analog world into crypto, while SmartFi starts in crypto and goes back into the real world.
Mining the Interest
Tilton said SmartFi had done more than a billion dollars in loans and transactions with mining companies. The next step, which he said would arrive at the start of the following year, was what he called the appropriate use of DeFi: users would be able to mine the interest from SmartFi's loans.
SmartFi likes the mining business, he said, because a large mining operation is hard to take to zero: it has hard assets and real work being done. The company had built its own blockchain and had been testing it for about two years, with modeling that mirrors its lending business, so that it would not launch untested "like a Luna". He said SmartFi wanted to work with the mining community on other chains that use the technology.
Questions: Spotting a Lender in Trouble
In the one audience question, Tilton was asked to say more about lending risk and the one-year period. He said fast execution is fine while prices rise, but in a falling market nobody wants a position that can go to zero in a nanosecond from a high-frequency trade. Celsius, in his words, faced a run on the bank by a DeFi protocol against the lending platform, while Three Arrows Capital levered up over and over through credit.
SmartFi traded with many of those firms, he said, and stopped about a month into the trouble. Its trade desk could hear it from counterparties: when a firm starts asking for different kinds of deals and offering different rates, you ask what the motivation is, recognize that somebody is in trouble, and cut it off.
This keynote was recorded at Mining Disrupt Miami 2022, July 26–28, 2022, when Bitcoin traded at $21,268. On October 30, 2026, it trades at $78,494. The buyback guarantee and the mining-interest product are SmartFi's own descriptions from the stage; the talk gives no audited figures for either.