Bitcoin Forum

I've been hearing quite a bit about Liquidium lately, and I’ll confess that am quite intrigued same time a bit skeptical. They claim to be "The Leading Peer-To-Peer Bitcoin Lending Protocol, Using Ordinal Inscriptions As Collateral Enabled By PSBTs And DLCs On Layer-1 Bitcoin." It sounds impressive, but what does it really mean for us?

From what I understand, Liquidium lets you borrow Bitcoin using assets like Inscriptions, Ordinals, Runes, and BRC-20 tokens as collateral. I’ve got a few of these, and the idea of using them without selling is appealing. But it also makes me wonder about the risks involved.

It feels like one of those things where I need to hear more from others who’ve tried it before jumping in myself.

The most likely scenario is that the collateral will become worthless, and the risk to the lender is that the borrower may default when that happens.

The risk to the borrower is that the lender may steal the collateral if it somehow becomes more valuable than the loan.

well if some idiot group is willing to accept a 1sat 'inscribed' token as collateral for a multi sat loan.. give them 1 sat of junk meme data then take the multiple sats they willing to give. then default and let them keep the single sat junk

I can tell a dead project even before it sets off or gains momentum.

Using Inscriptions, Ordinals, Runes, and BRC-20 tokens as collateral is bad news for the lender. What can stop someone from minting some useless tokens, sending them over as collateral in exchange for a loan, and then defaulting it afterward?
After all, he has managed to get rid of the useless tokens in exchange for the loan money.

Currently they are offering some insane yields over 300%. I wonder if this is entirely paid in BTC or if they are incentivizing lenders with some token they created. The interest paid from borrowers doesn’t seem to be nearly enough to pay such a high APY. It could be that their venture capital investors are covering that APY out of pocket to attract liquidity. Most loans are only for 7 day periods so they can afford to pay those amounts for a short time, but it is not a sustainable business plan.


They only seem to accept inscriptions from popular collections as collateral. The person borrowing BTC is only getting a fraction of what their inscriptions are worth on the open market and have to repay the loan within a few days. Borrowers could default but they would be getting less money than if they just sold it on a marketplace unless their collateral manages to lose so much value in only a week that it becomes worth less than their loan.

Anybody claiming to be the "leading" of something should be subjected to more doubts.

Anyway, if you have these inscriptions and Ordinals and Runes and whatnot and Liquidium is accepting them as collateral, this is your time to make the most of them. I don't know how high or low Liquidium's loanable amount is vis-à-vis the market value of the collateral, but I know that all these inscriptions rot over time. So if you have the opportunity to dump them now; if something like Liquidium accepts them in exchange for Bitcoin, strike while the iron is hot.

It's vice versa. The lender also have the risk if the collateral value become less than the amount lent.

This is yet another "shiny object" mumbo jumbo scam project.
Cryptocurrency lending simply doesn't work as a business model. several peer-to-peer crypto lending platforms have disappeared in the last 10 years. If you want to borrow crypto, just use the Lending forum on Bitcointalk.org. Just use altcoins with a solid price as a collateral.
Using digital garbage as Ordinals, Runes and other shit tokens as a collateral is as stupid as using NFTs as a collateral to get a loan.
I don't know about any lenders, who are willing to accept such digital garbage as collateral and lend actual BTC in exchange of that garbage.

You got it right, you send Runes or Ordinals as collateral and they give you Bitcoins. If you don't repay, collateral stays with them and if you repay, you get it back. I can't tell you if it's the next big thing in Bitcoin lending because that highly depends on the stupidity of people. I personally wouldn't give Bitcoin to anyone who offers me Ordinals as collateral but if someone is willing to do so, then give them their beloved inscribed MEME picture and get coins in your pocket.

I think that since there is a boom of Bitcoin Ordinals, this project looks very interesting but I wouldn't risk being a lender with a large amount of money. I would probably risk a small amount that I can afford to lose.

You would probably say that Dogecoin was a dead project, Shiba Inu was a dead project, and PEPE coin was a dead project but we live in a crazy world where everything is expected to happen.