A peer-to-peer lending primitive where loans are tokenized, repayments are flexible, and credit is programmable.

Debt Vaults on Hemi introduce a new primitive for peer-to-peer lending, allowing lenders to issue uncollateralized credit lines directly to any address. Built by Hemi co-founder Jeff Garzik, the system removes intermediaries and replaces collateral with programmable trust.

Unlike traditional lending protocols, Hemi Debt Vaults do not enforce loan terms. The protocol is a payment facilitator—economic agreements between lender and borrower are presumed to exist outside the system. There are no built-in enforcement mechanisms, no court analogs, and no automated liquidations. If a borrower defaults, the protocol takes no action. All terms must be agreed upon independently.

For users without access to traditional banking credit services, this opens up a new option: onchain credit without institutional gatekeeping. For others, it’s simply a more direct and transparent way to lend or borrow. Vaults are configurable with a wide range of collateral options, but don’t require collateral to operate. Everything runs on open, auditable code.

This makes Hemi’s lending infrastructure flexible, decentralized, and accessible, designed to serve both niche credit relationships and broader lending needs without introducing trust assumptions at the protocol level.

Ready For Beta Testing

As a product in development, Hemi Debt Vaults are ready for users to explore to help stress test and identify bugs in the deployment. With sufficient review, feedback, and validation, the product will mature into a market-ready phase, where Hemi Debt Vaults are ready to securely handle millions in volume.

In the meantime, we invite the Hemi Community to trial the vault’s functionality with small amounts of capital, provide feedback, and help refine the protocol as it moves towards production-grade readiness.

How Hemi Debt Vaults Work

The lender uniquely configures each credit line, setting a borrowing limit and APR for a specific address and ERC-20 token. Borrowers can draw down capital up to that limit, with interest accruing linearly over time. Repayments are flexible: partial or interest-only payments are allowed, and there are no maturity dates or liquidation risks.

Every active loan is tokenized as an ERC-721, making it tradable on secondary markets. A dual identity model ensures that while the current holder of the NFT manages repayments, the original borrower remains tied to the credit line’s usage and history.

This separation opens new economic possibilities. A borrower can transfer repayment obligations by selling the NFT. For example, a distressed borrower might sell the credit NFT at a discount to a third party, who repays the debt and captures the spread, similar to buying distressed debt or exercising a call option in traditional finance.

APR is dynamic and adjusts with utilization, interpolating between lender-defined minimum and maximum rates. As usage increases, so does the cost of borrowing, creating a pricing model that reflects both demand and risk.

Debt Vaults also include tools for lenders to forgive principal or interest and manage deposited funds. A global cap on outstanding loans protects against spam and denial-of-service attacks.

There are no protocol fees—just capital, trust, and transparent math, running peer-to-peer on Hemi.

Start testing Hemi Debt Vaults today at: https://hemidebtvault.replit.app/