Borrowing and repayment

Borrow against your BTC collateral and manage the debt on Ethereum. Within the position’s covered debt range, borrowing and repayment do not require a new Bitcoin movement for every balance change.

Production V2 supports an ongoing lending position. The oracle/grid epoch is a coverage-management period, not a forced loan repayment date.

Review the loan before borrowing

Confirm the borrowing asset, available liquidity, interest terms and maximum LTV for the deployment. Consider how the debt will affect your health factor.

Borrowing power and liquidation use different limits:

Collateral value = BTC amount × BTC price
LTV = debt value / collateral value
Health factor = collateral value × liquidation threshold / debt value

Convert satoshis to BTC first: 100,000,000 sats = 1 BTC.

For illustration only, 0.01 BTC at a hypothetical $80,000 price is $800 of collateral. An $80 debt gives 10% LTV. At an illustrative 85% liquidation threshold, health factor is 8.5. These values explain the arithmetic; they are not market quotes or published lending terms.

A position can exceed its borrowing limit before it becomes liquidatable. See Protocol parameters.

Borrow within current coverage

The lending pool checks the collateral, borrowing limit, available liquidity and position gates. New debt must not rely on stale coverage or collateral already committed to a pending withdrawal or release.

Production grids cover supported price and debt states. Routine changes within that domain use the existing authorization. If an additional borrow needs more coverage, that coverage must be signed, verified and recognized for the active vault before the extra funds are released.

Repay part or all of the debt

Repayment uses the loan’s underlying asset. Review any token approval, submit the repayment and verify the resulting debt balance.

Partial repayment reduces the liability without requiring a new Bitcoin signature first. It can improve the collateral ratio while leaving the loan open. Full repayment establishes the debt-zero condition for returning all eligible BTC.

Interest and rounding can change the amount needed to close a production loan. Confirm the final debt balance; do not infer closure from the amount initially borrowed.

Return BTC separately

Repayment does not itself spend the Bitcoin vault. Use Partial withdrawals to remove excess collateral while keeping a loan, or Closing your position after full repayment.

A debt change also does not erase an oracle reveal already published. Competing actions must follow the position’s canonical state and settlement rules.

Why an action may be refused

A borrow may be blocked by insufficient borrowing power, unavailable liquidity, stale coverage or a pending settlement. A withdrawal can be blocked even when the loan is not liquidatable because the borrowing limit is stricter than the liquidation threshold.

The demo supports partial repayment and additional borrowing with a smaller grid and explicit coverage refreshes. Its signing and refresh workflow does not define the production coverage limit.