Lygos Finance has unveiled its first truly non-custodial bitcoin-backed lending platform, aiming to reshape the crypto credit space with an institutional-grade architecture.
The platform utilizes Discrete Log Contracts (DLCs) developed by Atomic Finance, a company Lygos acquired earlier this year.
Key Highlights:
- Agreements are enforced directly on Bitcoin’s layer 1 leveraging ‘Discrete Log Contracts’ and pre-signed transactions.
- The infrastructure is supported by technology from Atomic Finance.
- The lingering effects of centralized lenders that failed in 2022 still impact the crypto space.
With Lygos’ innovation, they aim to restore trust by offering transparent, enforceable contracts without dependence on custodians. CEO Jay Patel expressed, “True non-custodial means exactly this; no participant other than the borrower and lender can move the funds.”
Lygos supports up to $100 million with BTC secured using a native 2-of-2 script and USDC/USDT issued on Ethereum, eliminating the need for wrapped bitcoin or synthetic collateral.
In the wake of the collapses of firms like Celsius Network and BlockFi, which attracted substantial deposits during the 2021 crypto boom by promising high returns on risky loans, Lygos aims to provide a more stable lending model. The system that collapsed has led to a significant loss of customer assets and damaged the reputation of bitcoin lending platforms.
By enforcing agreements on the Bitcoin blockchain, Lygos hopes to build confidence in the market for crypto lending.
