It is now possible to access secure and straightforward on-chain loans backed by Bitcoin. Using an advanced decentralized lending protocol, users can borrow up to $100,000 in USDC by leveraging their Bitcoin as collateral. This offers an accessible solution for those who wish to utilize the value of their crypto assets without needing to sell them.

What is a Bitcoin-Secured Loan?

A Bitcoin-secured loan allows you to temporarily use your Bitcoin as collateral. This means you gain access to liquid funds, such as USDC, without selling your Bitcoin. You maintain your investment in Bitcoin while benefiting from financial flexibility.

How Does It Work?

When you take out a loan, your Bitcoin is automatically converted into a special form known as wrapped Bitcoin (like cbBTC). This is then transferred to the decentralized lending protocol Morpho. Within a minute, the borrowed amount in USDC is deposited into your account. This process is fully automated, fast, and efficient.

What Is Morpho?

Morpho is an advanced decentralized lending protocol built on the blockchain. It provides users with secure and easy access to financial services, such as borrowing loans or earning interest. By utilizing smart contracts, Morpho ensures a fully transparent and efficient process without the need for traditional banks. This protocol plays a vital role in unlocking the potential of decentralized finance (DeFi), where users retain full control over their assets.

Why Is Over-Collateralization Important?

To keep the system secure and reliable, loans are always over-collateralized. This means you must have at least 133% of the amount you wish to borrow as collateral. This extra security minimizes the risk of losses or non-repayment. If the value of your collateral drops to 86% of the loan amount, it is automatically sold to repay the loan.

How to Avoid Liquidation

You can avoid liquidation by regularly monitoring the value of your loan and ensuring that the ratio between your loan and collateral remains healthy. Flexible repayment options also help, as you can decide when and how much you pay back.

Benefits of Bitcoin-Secured Loans

- **Flexibility**: There are no mandatory repayment dates or minimum terms, giving you full control over your financial planning. - **Quick Access to Liquidity**: The entire process, from application to disbursement, takes just a few minutes. - **Retain Bitcoin Investments**: Instead of selling your Bitcoin, you can use it as collateral and still benefit from potential future price increases.

Suitable for Beginners and Advanced Users

This service is designed to be accessible to both experienced users and newcomers to the crypto world. With an intuitive interface and a transparent process, it‘s easy to take out a loan and manage your loan status.

Future Expansions

While Bitcoin is currently the only supported collateral, there are plans to add more crypto assets in the future. This will make borrowing even more flexible and offer users a wider range of options.