Liquidium is a groundbreaking solution for Ordinal lending on Bitcoin that leverages the power of Discreet Log Contracts (DLCs) and Partially Signed Bitcoin Transactions (PSBTs) by partnering with DeepLake. Unlike existing protocols that rely on bridging Ordinals to other blockchains, Liquidium allows users to borrow and lend native Bitcoin against native Ordinals as collateral in a trust-minimal and custodian-free solution.
Ordinal Inscriptions are a new form of digital assets created by inscribing data on satoshis, the smallest unit of Bitcoin (BTC). The Taproot upgrade on the Bitcoin Network enabled new ways of encoding Bitcoin transaction data, allowing for more flexibility and privacy. Thanks to this upgrade, Ordinal Inscriptions were possible.
Ordinal Inscriptions are similar to NFTs (non-fungible tokens) on other blockchains such as Ethereum. NFTs are unique and indivisible digital tokens representing ownership of various digital or physical assets, such as art, music, games, collectibles, etc. Nonetheless, Ordinal Inscriptions have distinctive features that differentiate them from NFTs.
First, Ordinal Inscriptions inscribe data directly on the Bitcoin blockchain without relying on any intermediary layer or protocol. Therefore, inscriptions inherit the security and decentralization of the Bitcoin network, considered the most robust and resilient blockchain. This results in Ordinals being immutable and scarce by nature because of Bitcoin's limited block size and limited supply.
Second, Ordinal Inscriptions are ordered by when they were inscribed. The first Ordinal Inscription was index #1, the second index #2, and so on. This creates a natural scarcity and rarity for Ordinal Inscriptions based on their ordinality. The lower the index number, the more valuable and prestigious an Ordinal Inscription is likely to be.
Third, Ordinal Inscriptions can contain any data encoded in binary format. This includes images, videos, text, audio files, software applications, and more. With all of these unique characteristics, Ordinals are gaining demand from users across all blockchains.
Fourth, Ordinal Inscriptions can be inscribed on to different Satoshis, hence increase the value of the Ordinal itself. Sats are defined as as follow.
Recently, a new type of Ordinal Inscription has joined the market called BRC-20, which allows for Fungible Tokens on Bitcoin using the principle of Ordinal Inscriptions.
More than 10 million Ordinals have been inscribed since February 2023.
Ordinals continue to grow in volume and value, with some pieces selling for millions of dollars. However, Ordinal owners face a significant challenge: how can they access liquidity without selling their precious assets? Fortunately, Liquidium provides a groundbreaking solution for Ordinal lending on Bitcoin. Ordinal lending locks inscriptions as collateral to borrow Bitcoin, or other cryptocurrencies, while retaining ownership and exposure to their Ordinal.
NFT lending is a proven concept. It has been successfully implemented on Ethereum for several years. In fact, NFT lending has a total borrow volume of just about $2Bn on only Ethereum-based NFT lending platforms.
Recently, there has been a surge in NFT lending due to more big NFT companies joining the space, such as Blur.io with their Blend P2P NFT lending platform and most recently even Binance with a P2Pool NFT Lending protocol. The biggest NFT Companies are onboarding NFT lending solutions due to its massive demand.