Borrowing
Guidelines and information on Borrowing with Lendasat
Why should I borrow on Lendasat?
You need cash for your spending but don’t want to part with your Bitcoin? Borrowing on Lendasat allows you access funds while keeping your Bitcoin as collateral.
By using Lendasat during the beta phase, you’re not only meeting your financial needs, but you’re also helping us refine the product and improve the user experience. Your participation plays a key role in getting us closer to a fully public version of Lendasat, one that eliminates counterparty risk from Bitcoin-collateralized loans. Additionally, using a loan instead of selling your Bitcoin could help you avoid triggering tax events, depending on your jurisdiction. Please be sure to do your own research to understand the tax implications in your location. As we like to say, "Lendasat aims to do for credit what Bitcoin did for money."
When borrowing against my Bitcoin, what currency will I receive in return?
If you select the Virtual Card method, you will currently only be able to see offers in USDC over the Polygon network. This will evolve as our partner integrates new coins and blockchains.**
On Lendasat, you will receive stable coins for your loan (we're also testing fiat loans!), although the borrower can request to receive the balance on a Virtual Card. (In the future, multiple on-ramp and off-ramp options, as well as spending tools, will be available.)
As for the nature of the stable coins, Lendasat is a market-driven platform, meaning that lenders will be able to offer loans in all major stable coins and across all available blockchain networks. For now, loans are available in USDC and USDT on the Polygon, Ethereum, and Solana networks.
if you request your loan to be disbursed to a Virtual Card, you will only be able to request loans in USDC on the Polygon network.
On which blockchain network will I receive the principal of my loan?
Lendasat is a market-driven platform, meaning that lenders will be able to offer loans in all major stablecoins and across available blockchain networks, including Ethereum, Polygon, Solana, and Starknet.
How can I choose to have my loan disbursed in stable coins or on a Virtual Card?
If you select the Virtual Card method, you will currently only be able to see offers in USDC on the Polygon network. This will evolve as our partner integrates new coins and blockchains.**
Once you're logged into your Lendasat account, simply click on 'Request a Loan.' From there, you can choose an option: Stable coins or a Virtual Card. Afterward, you'll be able to select the loan offers that best fit your needs.
How should I repay the loan?
Borrowers must repay the lender directly, using the required stable coin and blockchain network.
The repayment must be sent in one go, for the full amount (principal + interest), and you will need to provide the transaction hash to complete the repayment process.
It is possible to use on-ramp solutions to pay in fiat and ensure the lender receives stable coins. For example, see MtPelerin.
Note that when sending Stable Coins on the blockchain, you will also need gas token to broadcast the transaction (Eth for Ethereum, POL for Polygon and SOL for Solana)
Who should I repay the loan to if I requested to receive a Virtual Card?
On Lendasat, a borrower's decision to use spending tools is unilateral and does not affect the order book. This means that the principal will be disbursed to you on a Virtual Card by the lender, but the repayment is owed to the lender themselves and no one else.
The repayment must be sent in one go, for the full amount (principal + interest), and you will need to provide the transaction hash to complete the repayment process.
How will I receive my collateral back?
Once your loan has been fully repaid, you will receive your Bitcoin collateral at the refund address you provided when setting up the contract.
Can my collateral be liquidated?
Yes, your collateral can be liquidated if its value falls below a certain threshold, or if you default on your repayment.
On Lendasat, your collateral will be liquidated if the LTV goes over 90% as of March 1, 2025. Don’t worry – you’ll receive margin calls via email, giving you the opportunity to add collateral and avoid liquidation.
Your collateral can also be partially liquidated if you do not repay the lender within the time frame specified in your loan agreement.
Can I add collateral to avoid being liquidated?
You can provide more collateral than the minimum TVL required by the lender in their offer. Adding extra collateral can help prevent margin calls and liquidation, offering additional security and flexibility for your position. You can also increase your collateral at any time during the loan by adding more Bitcoin.
Lendasat will send you emails:
- If the LTV goes over 80%
- If the LTV goes over 85%
To add collateral, just head to your loan contract and select the (+) button on the Collateral row.
Can I overcollateralize from the beginning?
Yes, on Lendasat, loans are overcollateralized by default. However, you can choose to add more collateral from the beginning if you feel it provides additional security and peace of mind. While the contract specifies the minimum collateral required based on the LTV requirements set by the lender, adding extra collateral can help and reduce the risk of liquidation.
Can I repay my loan in advance?
Since Lendasat contracts are fixed-term, repaying your loan in advance is not possible without adhering to the terms originally agreed upon. This means that you are required to pay back both the collateral and the full interest for the entire duration of the contract, as specified when the loan was established. Early repayment does not adjust the loan terms, and the borrower must fulfill the complete repayment as per the agreed schedule.
Can I extend a loan?
If you’re not ready to repay by the due date, or if you simply wish to repay later, you can now request an extension of your loan. This can only be done with the same lender with whom the original loan was issued, and only if they still have open offers available.