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Liquidium, the digital asset lending platform built exclusively for bitcoin-powered digital items, has started allowing non-fungible token collectors to borrow bitcoin liquidity using their collection of Runes and Ordinales as collateral. This bullish move will allow nft traders to hold more collections of Runes and Ordinales.
Liquidium allows users to borrow btc using ordinals and runes as collateral
In a blog post on July 30, Liquidium confirmed that it allows its users to borrow bitcoin liquidity using its Ordinals and Runes non-fungible tokens as collateral. This development is expected to breathe life into bitcoin-based nft collections, which have suffered from liquidity issues in recent months. Data compiled by cryptoslam.io shows that bitcoin nft trading sales volume plummeted to $74 million in July, down 54% from June 2024.
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The day has finally arrived!
Rune lending and borrowing is finally in open beta
Go collateralize your runes to borrow bitcoin in return!
https://t.co/qkYLV5e1qC image.twitter.com/tjtJPFigpw
—Liquidium | bitcoin DeFi (@LiquidiumFi) twitter.com/LiquidiumFi/status/1818028836338225351?ref_src=twsrc%5Etfw”>July 29, 2024
Liquidium, launched in August 2022, is a peer-to-peer (P2P) bitcoin lending platform that allows users to leverage their bitcoin-based assets, such as Ordinal Inscriptions (Ordinals) and Runes, as collateral for loans. It enables borrowing and lending bitcoin through secure, decentralized mechanisms using Partially Signed bitcoin Transactions (PSBT) and Discrete Ledger Contracts (DLC) on the bitcoin Layer 1 network.
The Liquiduim lending platform features a governance token based on the bitcoin Runes token standard. This token aims to decentralize the Liquidium lending protocol and encourage community participation in its governance. The Liquidium token also serves multiple purposes within the Liquidium ecosystem.
Some of the utilities of the Liquidium token include governance, allowing token holders to participate in decision-making processes. Additionally, the Liquidium token will allow holders to unlock premium features, offer discounts on platform fees, and earn rewards through various incentive programs.
How does Liquidium work?
The Liquidium lending protocol operates exclusively on the bitcoin blockchain, allowing users to lend and borrow native bitcoin using native ordinals and runes as collateral. Liquidium eliminates the need for middlemen or custodians. Users can take out bitcoin loans against their bitcoin assets without needing to sell them, thus preserving full ownership.
Liquidium also provides bitcoin liquidity to borrowers and earns a return on their holdings. Each loan involves a direct agreement between a lender and a borrower. In terms of long-term loans, the contract form includes the due date, which the lender and borrower agreed upon in advance. If the borrower pays on time, the collateral is returned and the lender receives the bitcoin paid plus the return. In case of default, the lender keeps the collateral.
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