Liquidium Starts Letting Users Borrow Bitcoin Liquidity Using Ordinals & Runes As Collateral

Updated: 31 July 2024

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Liquidium, the digital asset lending platform created exclusively for Bitcoin-powered digital items, has started allowing non-fungible token collectors to borrow Bitcoin liquidity using their Runes and Ordinal collection as collateral. This bullish move will allow NFT traders to hold more Runes and Ordinals collections.

Liquidium Lets Users Borrow BTC Using Ordinals & Runes As Collateral

In a July 30 blog post, Liquidium confirmed letting its users borrow Bitcoin liquidity using their Ordinals and Runes non-fungible tokens as collateral. This advancement is expected to bring to life the Bitcoin-based NFT collections, which have suffered liquidity issues in the past several months. Data compiled by cryptoslam.io shows that Bitcoin NFT trading sales volume plunged to $74 million in July, down 54% from June 2024.

The day has finally come!

Rune lending and borrowing is finally in open beta 🫡

Go collateralize your runes to borrow Bitcoin against it!

👉 https://t.co/qkYLV5e1qC pic.twitter.com/tjtJPFigpw

— Liquidium | Bitcoin DeFi (@LiquidiumFi) July 29, 2024

Launched in August 2022, Liquidium is a peer-to-peer (P2P) Bitcoin lending platform which allows users to leverage their Bitcoin-based assets, such as Ordinal Inscriptions (Ordinals) and Runes, as collateral for loans. It enables borrowing and lending Bitcoin through secure and decentralized mechanisms using Partially Signed Bitcoin Transactions (PSBTs) and Discreet Log Contracts (DLCs) on the Bitcoin Layer-1 network.

The Liquiduim lending platform features a governance token on the Runes token standard on Bitcoin. This token aims to decentralize the Liquidium lending protocol and foster community involvement in its governance. The Liquidium token also serves multiple purposes within the Liquidium ecosystem.

Some of the utility of the Liquidium token includes governance, allowing token holders to participate in decision-making processes. Additionally, the Liquidium token will enable holders to unlock premium features, provide platform fee discounts, and earn rewards through various incentive programs.

How Does Liquidium Operate?

Liquidium lending protocol operates exclusively on the Bitcoin blockchain, letting users lend and borrow native Bitcoin using native Ordinals and Runes as collateral. Liquidium eliminates the need for intermediaries or custodians. Users can secure Bitcoin loans against their Bitcoin assets without needing to sell them, therefore preserving full ownership.

Liquidium also provides Bitcoin liquidity to borrowers and earns yield on their holdings. Each loan involves a direct agreement between a lender and a borrower. In terms of long-term loans, the contract form includes the expiration date, which the lender and borrower agreed upon beforehand. If the borrower repays on time, the collateral is returned, and the lender receives the repaid Bitcoin plus yield. In case of default, the lender retains the collateral.