Lygos Finance revealed what it calls the first non-right Bitcoin BTC$ 112,917,71-Stoked credit platform, aimed at transforming the crypto-credit market with design of institutional quality.
The platform was built on discreet log contracts (DLCs) developed by Atomic Finance, which Lygos took over earlier this year.
DLC’s maintain bilateral credit agreements directly on the basic layer of Bitcoin, with an external oracle that testifies to facts such as BTC-USD prices, but not checking the funds. Borrowers and lenders sign transactions of contract performance, which means that the settlement is entirely on the Bitcoin blockchain without preservators or smart contract risks.
“Real non-rights means exactly this,” said CEO Jay Patel on Thursday in an emailed announcement. “No participant than the borrower and the lender can move the money.”
Lygos supports up to $ 100 million, with BTC collateral in a native 2-of-2 script and USDC/USDT issued on Ethereum. The model prevents packed Bitcoin or synthetic collateral, so that custody is kept native on both sides of the transaction.
During the Crypto Bull Market 2021, centralized lenders such as Celsius Network, Voyager Digital and Blockfi attracted billions in deposits due to promising high yields. But these returns were often built on risky, interconnected loans.
The system unraveled in 2022, when the collapse of the Terra-Luna Stablecoin and the bankruptcy of Hedgefonds Three Arrows Capital (3AC) had many of the most important lenders exposed. Massie recordings followed, which means that companies assets were freezed and bankruptcy must be submitted. Customers lost a lot of their deposited funds, and the reputation of Bitcoin Lending received a serious hit.
By enforcing agreements directly on the Bitcoin layer 1, Lygos said that trust can restore with transparent, enforceable contracts and no dependence on preservators. The debut marks a new attempt to come up with Bitcoin credit markets again, this time with non-right rails.
