Liquidium Vaults: What They Are and How They Work

TL:DR

• Liquidium Vaults show users structured bitcoin-backed loan strategies without automating execution.
• Each Vault outlines how to use BTC or USDT as collateral, borrow capital, and deploy that capital into a specific yield strategy.
• Users still execute every step manually and remain responsible for monitoring collateral, loan-to-value, and external protocol risk.

What Are Liquidium Vaults?

You hold BTC, but you need liquidity. Selling your Bitcoin may not be the move you want to make.

Bitcoin-backed loans offer another option. Instead of selling your BTC, you can use it as collateral, borrow against it, and deploy that capital elsewhere while keeping your Bitcoin position intact.

This approach, often described as borrowing against BTC, is central to many modern bitcoin lending strategies. It allows BTC to function as productive collateral instead of an asset that has to be sold in order to unlock value.

Liquidium Vaults make that process easier to understand. Each Vault lays out a structured strategy so users can see how to move from Bitcoin collateral to deployed capital without having to piece the full flow together on their own.

For a deeper look at how bitcoin-backed loans are used in practice, see Bitcoin-Backed Loans.

How Bitcoin-Backed Loans Work

At a high level, the structure is straightforward:

• You start with BTC
• You lock it as collateral
• You borrow stablecoins or another asset
• You deploy that capital into another protocol

Borrowing against BTC starts with opening a collateralized position. You can learn more about that process in Liquidium’s Borrow feature overview.

The goal is simple: earn more on the deployed capital than the total cost of borrowing.

That is the core structure behind many crypto lending strategies built around BTC. The exact deployment strategy may change, but the overall framework stays largely the same.

How Liquidium Vaults Work

Each Vault presents a specific strategy setup.

Users can clearly see:

• where to borrow
• where to deploy
• how the capital flow works

Vaults do not automate execution. Each step is carried out manually by the user.

That keeps the structure simple and transparent, while leaving full responsibility with the user managing the position.

Liquidium Vault Strategies

These are the current Vaults on Liquidium:

Steakhouse USDT Vault

• Lock BTC as collateral
• Borrow USDT
• Deploy USDT into Steakhouse

Focus: Stable deployment with a simple structure.

Ethena sUSDe Vault

• Lock BTC as collateral
• Borrow stablecoins
• Deploy capital into sUSDe via Ethena

Focus: Higher yield potential with added complexity.

Ondo USDY Vault

• Lock BTC as collateral
• Borrow capital
• Deploy into USDY via Ondo

Focus: Exposure to tokenized real-world asset yield.

Aave USDT Vault

• Lock BTC as collateral
• Borrow USDT
• Deploy USDT into Aave

Focus: Established DeFi lending structure using widely adopted protocols.

Solv BTC+ Vault

• Supply stablecoins
• Borrow BTC
• Deploy BTC into a yield strategy

Focus: BTC-native yield exposure where BTC is the borrowed asset. Returns are directly affected by BTC price movement, which can increase or reduce overall performance.

BTC Leverage Loop Vault

• Supply BTC as collateral
• Borrow USDT
• Swap USDT into BTC
• Re-supply BTC and repeat the loop

Focus: Increasing BTC exposure through a recursive borrowing and re-supply strategy. Each loop adds more BTC collateral, compounding exposure over time.

To explore the available strategies, visit Liquidium Vaults.

Submit a Vault Strategy

New Vaults can be created from structured strategy ideas.

Users can submit a Vault flow for review, and if it fits the system, it can be added to the Vaults interface.

This keeps the product open to new bitcoin lending strategies as they emerge.

Using Vaults to Borrow Against BTC

Bitcoin-backed loans make it possible to use BTC without selling it.

Liquidium Vaults provide a structured way to explore that approach. The strategy is laid out clearly, while execution remains manual and fully controlled by the user.

That also means each position requires active management. Collateral levels, deployed capital, borrowing costs, and market conditions all affect the result.

For users exploring bitcoin lending or looking for ways to borrow against BTC, Vaults offer a direct starting point.

Explore Vaults on Liquidium.

FAQ

What is a bitcoin-backed loan?
A bitcoin-backed loan uses BTC as collateral to borrow stablecoins or other assets. The BTC remains locked while the loan is active.

Is borrowing against BTC risky?
Yes. The main risks include liquidation if BTC drops in price and third-party risk from any external protocol used in the strategy.

What is a safe loan-to-value (LTV) ratio?
Many users stay in the 20% to 30% range to leave more room for BTC volatility, but the right level depends on market conditions and individual risk tolerance.

Are Liquidium Vaults automated?
No. Vaults are not automated. Each step is executed manually, including borrowing, deploying capital, and managing the position over time.

What makes Vaults different from other crypto lending strategies?
Vaults provide a clear structure for bitcoin-backed loan strategies. Instead of building a strategy from scratch, users can follow a defined flow from BTC collateral to deployed capital.

Do Vaults guarantee returns?
No. Returns depend on borrowing costs, yield from external protocols, BTC price movement, and how the position is managed. Outcomes can vary.

Disclaimer

Each Vault interacts with multiple protocols, which creates third-party risk. If one of those protocols fails, changes terms, or behaves unexpectedly, the position can be affected.

Each Vault also carries liquidation risk. Loan-to-value (LTV) measures the size of the loan compared with the BTC posted as collateral. If BTC falls in price and LTV rises too high, the position can be liquidated.

Vaults are currently an MVP. Liquidium provides the strategy structure, but execution and monitoring remain manual.