📗 The BTC Financing Thesis

Bitcoin is the world’s most valuable digital collateral — yet it remains largely unused in modern financial markets.

BTC is idle: ~19.9M BTC (≈ $2.5T) exists today, yet less than 1.1% participates in DeFi.
Wrapped dependence: Over 90% of BTC used in DeFi is synthetic, relying on custodians or bridges.
Trust gap: Most BTC holders are unwilling to relinquish custody or accept bridge risk.
Liquidity gap: Native BTC in DeFi represents only ~0.11% of total BTC supply.

This is not a demand problem — it is a trust and infrastructure problem.

Current approaches to BTC liquidity require one or more of the following tradeoffs:

For long-term Bitcoin holders, these tradeoffs are unacceptable.

As a result, the vast majority of BTC remains financially inactive.

Unlocking Bitcoin’s capital efficiency does not require turning BTC into a DeFi-native asset.

It requires enabling financing primitives that respect Bitcoin’s security model.

Self-custodial BTC liquidity: Borrowing and lending that keeps BTC locked natively on Bitcoin.
Bridge-free verification: Credit relationships enforced without wrapped assets or custodial bridges.
Deterministic enforcement: Loan outcomes defined upfront and executed programmatically.

Even modest native BTC participation has outsized impact.

Onboarding a small fraction of BTC natively can unlock hundreds of billions of dollars in safe, verifiable liquidity.
This represents a 10× expansion of credible DeFi liquidity — without increasing systemic risk.

Trust-first BTC financing expands the market rather than redistributing existing capital.

A native BTC financing layer aligns incentives across participants:

Borrowers: Unlock liquidity without selling BTC or sacrificing custody.
Lenders: Earn yield backed by real BTC collateral, not synthetic representations.

This creates sustainable credit markets rather than speculative yield loops.

What Bitcoin lacks today is a financing layer that:

LiquidSat is built to fill this gap.

Last updated 1 month ago