Instant Loans for Bitcoin Runes

Lend & Borrow Against Runes Instantly

Summary (TL;DR): Liquidium Instant Loans revolutionize Bitcoin borrowing and lending by offering immediate liquidity for borrowers using Runes as collateral and providing an automated, efficient yield-generating experience for lenders. Forget waiting for manual approvals – get BTC fast or put your BTC to work seamlessly. This guide covers what Instant Loans are, their benefits, how they work, step-by-step instructions for borrowers and lenders, security features, and associated fees.

The Wait is Over: Introducing Liquidium Instant Loans

In the fast-paced world of Bitcoin DeFi, waiting days or even hours for a peer-to-peer loan to be manually approved can feel like an eternity. Traditional P2P lending requires finding a counterparty, negotiating terms (or accepting pre-set offers), and waiting for manual signatures from both sides. This friction can hinder opportunities and create uncertainty.

Liquidium Instant Loans solve this problem. Built as a streamlined alternative to our classic manual loans, this feature allows borrowers to get BTC liquidity against their Rune collateral almost instantly, while lenders can deploy their capital efficiently without constant active management.

Why Choose Instant Loans? Key Benefits

Liquidium Instant Loans offer significant advantages over traditional manual P2P processes. Borrowers benefit from incredible speed, receiving BTC typically within 10 minutes after just one Bitcoin block confirmation. Lenders see their capital start working almost immediately once deposited and offered. The entire process is automated, eliminating the need for manual lender countersignatures to initiate a loan, thanks to secure smart contract interactions. This automation leads to greater efficiency for lenders, as their offers can be partially filled by multiple borrowers, ensuring capital doesn't sit idle, and funds are automatically returned upon repayment. Despite the advanced technology, the interface provides simplicity, making borrowing and lending straightforward. All this is built upon a foundation of security, leveraging robust technology like secure personal vaults and battle-tested signing mechanisms.

How Do Instant Loans Work? The Concept

Instant Loans operate on a distinct mechanism compared to traditional P2P matching. First, Lenders deposit BTC into secure, personal 1-of-2 multisignature vaults. They control one key, while a secure signing mechanism using ICP technology holds the other, guaranteeing the lender always retains ultimate control. Second, Lenders create loan offers from their vault balance, specifying terms like amount, duration, interest rate (APY), and crucial Loan-to-Value (LTV) ratios (Initial and Maximum). The Max LTV acts as a safety net, automatically pausing the offer if collateral prices drop significantly.

Third, Borrowers interact by browsing available Rune collateral types. When they select an amount of Runes to use, the system automatically finds the best available lender offer(s) from the aggregated vault liquidity matching their LTV needs. Fourth is Instant Activation: the borrower accepts the terms, signs the transaction, and the loan activates automatically via the secure signing layer without manual lender intervention. BTC goes to the borrower, Runes get locked. Finally, the process concludes with Automated Repayment/Default. Successful repayment returns BTC (principal + interest) to the lender's vault and Runes to the borrower. If the loan defaults, the Rune collateral is automatically sent to the lender's primary wallet.

For Borrowers: Get BTC Instantly Against Your Runes

Need quick Bitcoin liquidity using your Runes? The process is simple:

Prerequisites:

• A compatible wallet (Xverse, Magic Eden, OKX, Phantom, UniSat, Leather, Wizz)

• Sufficient confirmed Runes for collateral

• Enough confirmed BTC for network fees

Steps:

First, connect your wallet to Liquidium. Navigate to the Borrow page, select the "Runes" tab, and toggle the switch to "Instant", opting in if necessary. Find the Rune project you hold and click "Borrow".

Next, select the amount of Runes to use as collateral using the input field or slider; the interface will display available loan terms based on LTV. Carefully review the displayed BTC amount you'll receive, interest, duration, and LTV. If satisfied, click "Submit".

Finally, sign the transaction presented by your wallet. After approximately 10 minutes (one block confirmation), the BTC loan amount will arrive in your wallet. You can track your active loan on the Portfolio page.

For Lenders: Earn Yield Automatically with Your BTC

Put your Bitcoin to work efficiently by providing liquidity for Instant Loans with minimal active management:

Prerequisites:

• A compatible wallet

• Sufficient confirmed BTC for depositing into the vault and covering the deposit network fee.

Steps:

Start by connecting your wallet. Go to the Lend page, select "Runes", and ensure the toggle is set to "Instant". If it's your first time, you'll need to create a personal vault by initiating the process (e.g., clicking "Lend" on a Rune) and signing the transaction. Crucially, save the Vault Public Key (Pubkey) shown during creation for potential emergency recovery.

Next, deposit BTC into your newly created vault. Go to Profile > Manage (Vault section) > Deposit, enter the amount, sign the transaction, and wait for confirmation.

Now, create your loan offer. Return to the Lend > Runes (Instant) page and click "Lend" on a Rune project. Set your desired Loan Duration, total BTC Amount for the offer, Interest/APY, Initial LTV, and the vital Maximum LTV (your safety threshold against collateral price drops). Review the terms and authorize the offer by signing the message in your wallet.

Your work is essentially done. Borrowers can now instantly accept your offer (fully or partially). Repayments automatically return principal plus interest to your vault, while defaulted collateral (Runes) is sent to your main wallet. You can monitor activity on your Portfolio page and withdraw available BTC from your vault back to your wallet anytime via Profile > Manage > Withdraw (you pay the network fee for withdrawal).

Instant vs. Manual Loans: Understanding the Difference

While both Instant and Manual loans allow borrowing and lending on Liquidium, they cater to different needs and operate distinctively:

• Speed & Automation: Instant Loans are significantly faster, activating automatically after the borrower signs. Manual loans require the lender to be online and manually countersign, which can introduce delays.

• Process: Instant Loans use automated liquidity vaults. Manual Loans are direct peer-to-peer offers listed in an order book.

• Lender Effort: Instant Lending is largely passive after setup. Manual Lending requires active monitoring of accepted offers and timely countersigning.

• Offer Flexibility: Manual Loans allow lenders to set very specific terms for individual offers. Instant Loan terms are based on the lender's vault offer settings, and borrowers accept the best match available from the pool. Lenders have less control over who takes their Instant Loan offer compared to manually approving a borrower.

• Capital Efficiency (Lending): Instant Loan offers benefit from partial fills, meaning multiple borrowers can utilize parts of a single large offer, leading to potentially higher capital utilization for lenders. Manual offers are typically accepted entirely by one borrower.

• Fees: Instant Loans have a specific Borrower Activation Fee (0.25% or 1000 sats min). Manual Loans do not have this fee, but the overall interest rates might differ based on market dynamics for each loan type. Platform fees on interest apply to both (with similar conditions).

Comparison Table: Instant vs. Manual Rune Loans

Understanding the Technology & Security

Liquidium Instant Loans are built with security as a top priority, incorporating multiple protective layers. Personal Vaults for lenders utilize a 1-of-2 P2SH multisignature setup, ensuring the lender always retains access via their key and the saved Vault Public Key, even independently of the Liquidium interface. Loan activation employs a secure ICP Signing Layer, leveraging the Internet Computer Protocol's threshold signing (TSS/MPC). This battle-tested technology facilitates decentralized transaction authorization without exposing funds to single-party control during activation.

Furthermore, On-Chain Verification through native ICP Rune Indexers (from Omnity Network) ensures transparency for collateral and loan values. Reliable Pricing data for LTV calculations is sourced from reputable oracle builders like Chainsight, which aggregate multiple endpoints for accuracy. Importantly, Liquidium provides Abstraction, handling the technical complexities so users don't need direct ICP interaction.

Fees for Instant Loans

Understanding the costs involved is crucial. Here’s a breakdown for Instant Loans:

• Borrower Activation Fee: Paid by the borrower when the loan starts. It's the higher of 0.25% of the loan principal OR a minimum of 1000 sats.

• Lender Platform Fee: Paid by the lender out of the interest earned when a loan is successfully repaid. This fee is 20% of the interest, but it's only applied if the calculated fee amount reaches 2000 sats or more. If the loan defaults, the lender pays no platform fee. Token holdings may provide discounts or bonuses.

• Bitcoin Network Fees: These standard blockchain fees vary based on network congestion.

  • Borrowers pay network fees to start the loan and to repay it.

  • Lenders pay network fees when depositing BTC into their vault, withdrawing BTC from it, or potentially during emergency recovery actions.

Who Should Use Instant Loans?

Instant Loans are particularly well-suited for:

• Borrowers who need immediate BTC liquidity against their Runes and value speed and simplicity over potentially negotiating slightly better terms in the manual market. It's ideal for reacting quickly to market opportunities or addressing urgent financial needs.

• Lenders who prefer a more passive, automated approach to earning yield. The efficiency of partial fills and the automated risk management via Max LTV make it an attractive option for deploying capital without requiring constant monitoring and manual approvals.

What's Next? Future Enhancements

Liquidium is committed to continuous improvement. Potential future developments for Instant Loans could include options for lenders to automatically reactivate their offers after repayment (Offer Reactivation), capabilities for borrowers to combine multiple smaller offers into a single larger loan (Offer Stitching), and support for Expanded Collateral types beyond Runes.

Get Started with Instant Loans Today!

Experience the efficiency and speed of modern Bitcoin P2P lending. Whether you need fast BTC or want to earn yield with ease, Liquidium Instant Loans provide a secure, streamlined solution.

Connect your wallet and explore the Instant Loan options on the Borrow or Lend pages now!