Beyond collecting and trading Bitcoin Ordinals, these digital assets can also serve as collateral to access BTC loans. This guide explores Ordinal lending mechanics and provides step-by-step instructions for securing a loan.
Understanding Bitcoin Ordinals
Bitcoin Ordinals, also known as Ordinals inscriptions or digital artifacts, are unique digital assets created by inscribing data onto individual satoshis on the Bitcoin blockchain. Introduced in January 2023, Ordinals have sparked significant interest, fostering markets for art, profile pictures (PFPs), and rare satoshis.
👉 Discover how Ordinals transform Bitcoin’s utility
Key Features of Ordinals:
- On-chain metadata: Unlike traditional NFTs, all data resides on the Bitcoin blockchain.
- Diverse use cases: From collectibles to collateral for loans.
How Ordinal Lending Works
Ordinal lending allows borrowers to lock their inscriptions as collateral in exchange for BTC loans. Platforms like Liquidium facilitate peer-to-peer (P2P) lending via discreet log contracts (DLCs), ensuring:
- Non-custodial escrow: Ordinals remain locked until loan repayment.
- Default handling: Unpaid loans transfer the Ordinal to the lender.
Process Flow:
- Borrowers select an Ordinal from supported collections.
- Lenders set loan terms (amount, duration, interest).
- Smart contracts automate collateral management and repayments.
👉 Explore Bitcoin lending platforms
Step-by-Step: Securing a Loan on Liquidium
Set Up Xverse Wallet:
- Download the Xverse Chrome extension.
- Fund your wallet with BTC for transaction fees.
Connect to Liquidium:
- Visit Liquidium and click "Borrow."
- Approve wallet access and sign the connection message.
Select Collateral & Loan Terms:
- Choose an Ordinal from available collections.
- Review loan amount, duration, and interest rate.
Repayment:
- Repay the loan (+ interest) to unlock your Ordinal.
FAQs
1. What distinguishes Bitcoin Ordinals from NFTs?
Ordinals store all metadata on-chain, whereas NFTs often rely on external storage.
2. How are loan defaults handled?
Lenders receive the borrower’s Ordinal if repayment fails.
3. What’s the average value of Bitcoin Ordinals?
Prices range from $50 to $25,000, with premium collections like TwelveFold fetching over $150,000.
4. Can I lend BTC without owning Ordinals?
Yes! Lenders provide BTC and select preferred collateral from listed collections.
5. What fees apply on Liquidium?
A 20% fee is deducted from earned interest.
Conclusion
Ordinal lending unlocks liquidity for collectors while offering lenders a chance to earn interest—all secured by Bitcoin’s robust blockchain. Ready to start?
👉 Begin your Ordinal lending journey today
### SEO Keywords:
- Bitcoin Ordinals
- Ordinal-backed loans
- BTC lending
- Liquidium
- Xverse wallet
- Bitcoin DeFi
- NFT collateral