The True Cost of Money: Investing in Tare
An unsecured personal loan in America loses up to 16% of its value to intermediation. Even on the cheaper end of the spectrum, in prime auto loans and mortgages, the legacy lending stack takes 6-12%* of every dollar borrowed over the life of the loan.
When you add this up across the $18 trillion of household debt Americans owe today, well north of $100 billion a year is gobbled up by the plumbing of our lending system, ultimately coming out of the pockets of borrowers and lenders. While software has changed the economics of most industries, the cost of financial intermediation in the US hasn’t meaningfully changed since modern capital markets started forming in the 1880s. Why?
The reason is surprisingly simple: for the entire history of modern credit, there hasn’t been a way for multiple parties to share a single source of truth. The lending intermediaries (the servicer, backup servicer, trustee, paying agent, calculation agent, rating agency, custodian, auditor, and DTCC) all exist to fill that gap, coordinating, cross-checking, and backing each other up so that no one in the chain can cheat or lose track.
However, with stablecoins, scalable blockchains, and AI, the entire value chain can now be rebuilt around a single source of truth. That’s where Tare comes in.
Tare runs the full lifecycle of a loan, from origination to servicing and capital markets, on a single shared ledger. Smart contracts and the blockchain together take the place of the trustee, paying agent, and calculation agent. Custody, rating, and clearing become properties of the ledger, and auditing becomes continuous and public. AI absorbs the operational work (statements, collections, customer service) that used to require a call center, and all payments are settled in stablecoins. On the borrower side, distribution partners plug into an origination API to gain access to compliant, programmable lending pools. On the capital side, the architecture is designed for a marketplace through which DeFi protocols, PE funds, and insurance feeders alike can purchase pools of loans with the full repayment history recorded onchain. These pieces come together to offer a streamlined credit system that originators can plug into the way merchants plug into Stripe. On Tare, the marginal costs of lending will likely trend towards gas plus on- and off-ramp fees, orders of magnitude below the legacy stack.
Tare is starting in near-prime consumer lending, where institutional credit buyers are developed and where the gap between the rate borrowers actually pay and what their credit risk would justify is wide. While proving out the Tare platform through first-party loan origination, Tare also plans to support third-party loan originators across the asset-backed lending spectrum, including auto, commercial, and emerging markets.
Tare is led by Kevin Miao, Lucas Vogelsang, and Keerthi Moudgal, a founding team uniquely suited to this challenge. Kevin helped build one of the earliest onchain private credit funds, BlockTower Credit, and structured one of the largest onchain RWA financing deals of its time, after a career trading structured credit at Citi and running operations at Capchase. Lucas co-founded Centrifuge in 2017 and spent nearly a decade building the first generation of onchain securitization rails, including the institutional tokenization of $220 million of private credit funds with Sky and BlockTower (in partnership with Kevin). Keerthi spent nearly a decade at JPMorgan, most recently as Head of Product for Kinexys (formerly Onyx) Digital Assets, JPM’s institutional blockchain platform, which she helped launch in 2020 and which today moves more than $5 billion daily. Together, they have a rare combination of expertise at the intersection of credit, DeFi, tokenization, and blockchain infrastructure.
Today, we’re extremely excited to announce that we’re leading Tare’s $13.25 million seed round. Joining us are leading private credit firms like Apollo and Janus Henderson, and a great group of funds, angels, and operators from crypto and fintech, including Stani Kulechov of Aave and Phil Potter of Tether, both of which are also Blockchain Capital portfolio companies.
Tare is rebuilding the rails on which the American credit system runs, seeking to return billions of dollars to hardworking Americans. That is a mission we deeply align with at BCAP, and we couldn’t be more excited to partner with Kevin, Lucas, and Keerthi.
Co-authored with Jonah Burian
*These are derived estimates: Origination fees 3-8%: Upstart 10-K FY24, Servicing fees 1-3% (duration-adjusted): Chase Issuance Trust Series 2025-A1 prospectus (1.50% annual), Securitization 2-5%: NAIC Consumer ABS Primer.
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