Author: Ordinal Labs

Translation: MetaCat

Typesetting: MetaCat

Today we'll take a deep dive into Liquidium, a native P2P Bitcoin Ordinals lending solution. Through this article, we will clarify what ordinal inscriptions are, what unique properties they have, the challenges they pose, and how Liquidium provides a solution for them.

The emergence of ordinal inscriptions

Ordinal Inions, also known as digital artifacts, have taken the digital asset world by storm. **Ordinal inscriptions are created by recording data on satoshis, the smallest unit of Bitcoin (BTC). With the support of the Bitcoin network Taproot upgrade, Ordinals provides a new possibility for transaction data encoding, adding more flexibility and privacy to transactions.

Although similar to non-fungible tokens (NFTs) on other blockchains like Ethereum, Ordinals have unique features that set them apart. They are unique in that they are recorded directly on the Bitcoin blockchain, without relying on any intermediate layers or protocols. As such, Ordinals inherit the unparalleled security and decentralization of Bitcoin's powerful blockchain network.

Ordinals: A closer look

Understanding the special features of Ordinals can help us understand their rise:

1. Immutability and Scarcity: Ordinals derive these qualities from the limited block size and limited supply of the Bitcoin network.
2. Ordinals: Ordinals are sorted according to the order of their inscriptions. The lower the value, the higher the prestige and value of the inscription.
3. Data Versatility: Ordinals can contain any binary-encoded data, such as images, videos, text, and even software applications.
4. Added value: Ordinals can be engraved on different Satoshi (such as rare Satoshi), which may increase the value of Ordinals themselves.

Recently, a new ordinal inscription called BRC-20 has been very popular in the market, using the principle of ordinal inscriptions to create fungible tokens (Fungible Tokens) on Bitcoin.

Liquidity Challenges for Ordinals Holders

The growth in the number and value of ordinal inscriptions is undeniable, with some inscriptions selling for millions of dollars. However, this remarkable growth has not been without challenges. For holders of Ordinal Inscriptions, the most pressing question is: how to gain liquidity without selling their assets. Liquidium, a breakthrough Bitcoin ordinal inscription lending solution, provides a timely answer to this problem.

The Current State of NFT Lending

NFT lending is nothing new. Ethereum has successfully practiced it over the years. However, Bitcoin's huge market capitalization suggests that the lending solution could have a significant impact if applied to ordinal inscriptions. This is where Liquidium comes in, providing ordinal inscription owners with a much-needed loan solution.

Introducing Liquidium: Bitcoin Ordinal Inscription Lending Solution

Liquidium is a P2P lending protocol that runs exclusively on the Bitcoin blockchain. This innovative solution enables users to lend and borrow native Bitcoin using native ordinal inscriptions as collateral, eliminating the need for intermediaries or custodians.

This protocol has several advantages:

• Users can use borrowed bitcoins to purchase more ordinal inscriptions or any other bitcoin network asset without changing wallets, blockchains or platforms.
• Users do not need to map their ordinal inscriptions to another chain, which may involve additional risks and costs.
• Liquidium leverages the security, scalability, and privacy of Bitcoin.

Liquidium's MVP has launched on Stacks and will be the first Bitcoin-native ordinal inscription lending marketplace. This will enable Ordinal DeFi and prove its growing popularity as Ordinal Lending's Waitlist received over 15,000 submissions in less than 24 hours.

How Liquidium Works

Liquidium works transparently and directly:

1. Borrowers apply for loans by setting the desired loan terms and locking their ordinal inscriptions as collateral.
2. The lender reviews the loan request and offers bitcoin to borrowers who meet the loan criteria, thereby initiating the loan.
3. If the borrower does not repay the loan on time, the loan is in default and the ordinal inscription will be transferred to the lender.

To maintain fairness and security, DeepLake Oracles verify loan outcomes by checking on-chain activity. The protocol ensures minimal trust dependencies and transparent transactions.

in conclusion

With Liquidium, ordinal inscription owners can gain liquidity without giving up ownership of their assets. This is an important step in NFT lending, specifically catering to the needs of ordinal inscription owners.

Liquidium enables true Bitcoin DeFi by providing a P2P lending platform that uses Ordinals as Bitcoin mainnet collateral. This revolutionary protocol will reshape the lending landscape and open up new opportunities in the world of Ordinals.

For more information, check out the full documentation here

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