Bitcoin-backed borrowing lets you access cash without selling your BTC. Here's how it works.
The Basics
Instead of selling Bitcoin, you lock it as collateral and receive a loan. When you repay the loan, you get your Bitcoin back.
Key Terms
| Term | Meaning |
|---|---|
| LTV | Loan-to-Value ratio - how much you can borrow vs collateral |
| Collateral | Your Bitcoin locked in the smart contract |
| Liquidation | When collateral is sold to repay the loan |
| APR | Annual interest rate on the loan |
Step-by-Step Process
1. Choose Your Terms
Select your preferred:
- Loan amount
- LTV ratio (typically 50-70%)
- Duration (1-12 months)
- Payout method
2. Lock Collateral
Send Bitcoin to a 2-of-3 multisig address. This ensures:
- You maintain partial control
- No single party can steal funds
- Automatic execution of terms
3. Receive Funds
Once collateral is confirmed, you receive:
- Stablecoins (USDC/USDT)
- Fiat via bank transfer
- Virtual card for spending
4. Monitor Your Position
Keep an eye on:
- Current LTV ratio
- Bitcoin price movements
- Time until repayment due
5. Repay and Reclaim
When you repay:
- Principal + interest
- Your Bitcoin is released
- Back to your wallet
Liquidation Protection
If Bitcoin's price drops significantly:
| LTV Level | Action |
|---|---|
| 50-70% | Safe zone |
| 80% | Warning alert |
| 85% | Urgent - add collateral |
| 90% | Liquidation triggered |
You can always add more collateral or partially repay to lower your LTV.
Ready to Start?
- Borrowers: borrower.lendasat.com
- Learn more: Documentation