Liquidium The first NFT lending protocol in the Bitcoin ecosystem
Liquidium The first NFT lending protocol in the Bitcoin ecosystem.
Author: Ordinal Labs Translator: MetaCat
Today, we will take a deep dive into Liquidium, a native P2P Bitcoin Ordinals lending solution. Through this article, we will clarify what Ordinal Inscriptions are, their unique attributes, the challenges they bring, and how Liquidium provides solutions for them.
The Emergence of Ordinal Inscriptions
Ordinal Inscriptions, also known as digital artifacts, have swept the digital asset world. They are created by recording data on the smallest unit of Bitcoin (satoshis). With the support of the Bitcoin network’s Taproot upgrade, Ordinals provide new possibilities for encoding transaction data, adding more flexibility and privacy to transactions.
Although similar to non-fungible tokens (NFTs) on other blockchains like Ethereum, Ordinals have unique features that set them apart. Their uniqueness lies in being directly recorded on the Bitcoin blockchain without relying on any intermediaries or protocols. Therefore, Ordinals inherit the unparalleled security and decentralization of the Bitcoin blockchain network.
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Ordinals: A Closer Look
Understanding the special features of Ordinals can help us grasp their rise:
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Immutability and Scarcity: Ordinals derive these qualities from the limited block size and limited supply of the Bitcoin network.
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Ordinality: Ordinals are sorted based on the sequence of their inscriptions. The lower the number, the higher the reputation and value of the inscription.
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Data Versatility: Ordinals can include any binary-encoded data, such as images, videos, texts, or even software applications.
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Added Value: Ordinals can be engraved on different satoshis (e.g., rare satoshis), which may increase the value of the Ordinals themselves.
Recently, a new type of Ordinals called BRC-20 has gained popularity in the market, using the principles of Ordinals to create fungible tokens on Bitcoin.
Liquidity Challenges Faced by Ordinals Holders
The growth in the quantity and value of Ordinals is undeniable, with some inscription works selling for millions of dollars. However, this significant growth is not without challenges. For holders of Ordinals, the most pressing question is: how to obtain liquidity without selling their assets. Liquidium, as a groundbreaking Bitcoin Ordinals lending solution, provides a timely answer to this problem.
The Current State of NFT Lending
NFT lending is not new. Ethereum has successfully practiced it for years. However, the enormous market value of Bitcoin suggests that if a lending solution is applied to Ordinals, it will have a significant impact. This is where Liquidium comes in, providing much-needed lending solutions for Ordinals owners.
Liquidium Introduction: Bitcoin Ordinal Lending Solution
Liquidium is a P2P lending protocol specifically designed to operate on the Bitcoin blockchain. This innovative solution allows users to lend and borrow native Bitcoins using native ordinal tokens as collateral, eliminating the need for intermediaries or custodians.
The protocol has several advantages:
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Users can use borrowed Bitcoins to purchase more ordinal tokens or any other Bitcoin network assets without the need to change wallets, blockchains, or platforms.
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Users do not need to map their ordinal tokens to another chain, which may involve additional risks and costs.
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Liquidium leverages the security, scalability, and privacy of Bitcoin.
Liquidium’s MVP has been launched on Stacks and will become the first Bitcoin-native ordinal lending market. This will make Ordinal DeFi possible and prove its growing popularity, as the Waitlist for Ordinal Lending received over 15,000 submissions in less than 24 hours.
How Liquidium Works
Liquidium operates transparently and directly:
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Borrowers apply for loans by setting the desired loan terms and locking their ordinal tokens as collateral.
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Lenders review loan requests and provide Bitcoin to borrowers who meet the loan criteria, thus initiating the loan.
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If borrowers fail to repay the loan on time, the loan defaults, and the ordinal tokens are transferred to the lender.
To maintain fairness and security, DeepLake Oracles verify loan outcomes by checking on-chain activities. The protocol ensures minimal trust dependency and transparent transactions.
Conclusion
With Liquidium, ordinal token holders can access liquidity without relinquishing ownership of their assets. This is an important step in NFT lending, catering specifically to ordinal token holders.
By providing a P2P lending platform that uses ordinals as collateral on the Bitcoin mainnet, Liquidium achieves true Bitcoin DeFi. This revolutionary protocol will reshape the lending landscape and create new opportunities in the world of ordinals.
