Lendasat DocsProtocol
Understand how Lendasat's non-custodial Bitcoin lending protocol works.
Using Lendasat means using a real Bitcoin wallet. When you create your account, a non-custodial wallet is automatically generated for you, along with a seed phrase.
Your seed phrase is the only way to recover access. Lendasat does not store this information. You, and only you, have access to your funds.
Core Principle
We are not a custodian. We never hold your Bitcoin. You don't have to trust us.
Lendasat vs. Centralized Platforms
| Feature | Lendasat | Centralized Platforms |
|---|---|---|
| Custody | You (non-custodial) | Platform (custodial) |
| Collateral Access | Locked in multisig | Controlled by platform |
| Trust Model | Trustless | Trust & reputation based |
| Transparency | On-chain, verifiable | Opaque internal systems |
| Censorship Resistance | Yes | No |
| Platform Failure Risk | None (funds safe) | High (loss possible) |
How the 2-of-3 Multisig Works
Loans are secured through a 2-of-3 multisignature escrow:
Borrower
Holds 1 key
Lender
Holds 1 key
Lendasat
Holds 1 key (dispute resolution only)
To move collateral, 2 of 3 parties must sign:
| Scenario | Who Signs | Result |
|---|---|---|
| Normal repayment | Borrower + Lender | Collateral returned |
| Liquidation | Lender + Lendasat | Lender receives collateral |
| Dispute resolved | Winner + Lendasat | Funds go to winner |
Key guarantees:
- Lender cannot steal collateral alone
- Borrower cannot move it prematurely
- Lendasat cannot access funds alone, ever
Liquidation Thresholds
| LTV Level | Status | Action |
|---|---|---|
| 50-70% | Safe | Normal operation |
| 80% | Warning | Margin call notification |
| 85% | Urgent | Second warning issued |
| 90% | Critical | Liquidation triggered |
Understanding LTV
Formula: LTV = (Loan Amount ÷ Collateral Value) × 100
Example:
| Scenario | Loan | Collateral | LTV |
|---|---|---|---|
| Initial | $5,000 | $10,000 (0.1 BTC @ $100k) | 50% |
| BTC drops to $60k | $5,000 | $6,000 (0.1 BTC @ $60k) | 83.3% |
| BTC drops to $55.5k | $5,000 | $5,555 (0.1 BTC @ $55.5k) | 90% → Liquidation |
How to Avoid Liquidation
Add Collateral
Top up your BTC anytime via the "Add Collateral" button in your loan contract.
Repay Early
Pay back the loan before LTV reaches dangerous levels.
Monitor Regularly
Watch your LTV, especially during volatile markets.
Need Help?
Questions about the protocol? Check our FAQ or contact support.