How to Borrow Bitcoin (By Using Ordinals as Collateral)

How to Borrow Bitcoin Using Ordinals as Collateral Easily

If you need bitcoin but aren’t willing to sellany assets to get it, borrowing bitcoin by using Ordinals as collateral is agreat alternative.

In this guide, we’re bringing you the simplestway to do this by using the Liquidium app. Follow our step-by-step explanationto get your bitcoin loan underway.

What Are Ordinals-Backed BitcoinLoans?

Ordinals-backedbitcoin loans are loans made in BTC for which you provide your Ordinals as collateral.

When you pay back the loan, your Ordinals arereleased back to you. In case your loan defaults, the borrower gets yourOrdinals as compensation.

In effect, this is a great way to get access toBTC short-term without having to sell your Ordinals.

If you know you’re going to return theborrowed BTC within the time period provided, this is arguably easier thanhaving to sell your holdings.

How to Borrow Bitcoin UsingOrdinals As Collateral, Step by Step

Borrowing bitcoin using Ordinals as collateralis pretty easy using Liquidium. 

First, you’ll open the Liquidium app and choose the Borrow tab in the top right corner. Then, makesure you’ve clicked on Ordinals in the asset tabs below.

Then, in the list of assets, find an Ordinalyou own and are willing to offer as collateral. You can either browse the listor use the search bar to find it.

When you’ve found your Ordinals, click on‘Borrow.’

In this window, you’ll set the terms of theloan.

You’ll be offered an overview: offer,interest, LTV, and term length are all shown. If none of these match yourcriteria, you can also click on Alternative offers to see more.

When you’ve found the perfect offer, don’t forget to choose the transaction speed. This is how long it will take the BTCloan to land in your wallet. Faster speeds also mean higher transaction fees.

Once you’re happy with everything, click on‘Continue’ and confirm in the wallet.

If there is more than one offer within a 2% range of your loan amount, you’ll have the option to accept whichever offer is signed first. Otherwise, you’ll have to accept the standalone best offer.

After this, all there’s left to do is await the lender’s approval. The lender has to start the loan manually, so it can take a bit until they sign and broadcast it. Once the BTC is ready for you, the loan period starts.

You can track it under the ‘Borrowing’ option in your Liquidium portfolio. You can repay your loan from this ‘Portfolio’ page as well.

Find your loan, click on Repay, set the transaction speed and confirm and sign the transaction. Once it’s completed, you can unlock your Ordinals by clicking the Unlock option and again setting the transaction speed and fee, then waiting for it to go through.

The Bottom Line

Borrowing BTC by using Ordinals as collateralis pretty easy and straight forward using the Liquidium app. Just find theOrdinals you want and follow the simple steps. But make sure to repay the loan in time to get your Ordinals back!