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Chainflip, the decentralised cross-chain protocol that has processed over $3 billion in swap volume, today announced the upcoming launch of its most ambitious product vertical yet: Native Bitcoin Lending and Cross-Chain Liquidity Loans.These upcoming systems, Generalised Lending (CGL) and Chainflip Liquidity Lending (CLL), will mark the first time that users can borrow and lend native BTC and other major crypto assets permissionlessly across chains without relying on wrapped tokens, bridges, or centralised intermediaries.“This is one of the most important steps forward for Chainflip and for DeFi. Lending has always been missing a truly native cross-chain solution to service the BTC market. Chainflip is perfectly poised to blow that market wide open,” said Simon Harman, CEO of Chainflip Labs.Solving a Core Problem in DeFi LendingWhile DeFi lending has grown significantly on chains like Ethereum, most products that offer BTC lending rely on wrapped or bridged assets. This poses a serious limitation, as wrapping assets is often treated as a taxable sale, and existent wrapped BTC products, like WBTC or cbBTC are tied to centralised custodians.Despite this, Aave currently holds over $4.3bn in WBTC collateral—showing the demand for BTC-collateralized loans is massive.Chainflip will solve this by enabling true native BTC lending, directly from its threshold signature vaults, secured by a permissionless validator network. This native approach bypasses the need for wrapped tokens entirely.Introducing Generalised Lending (CGL)The first phase of the rollout, Generalised Lending, brings a familiar model to users: lend or borrow supported assets (BTC, ETH, SOL, USDC, USDT, etc.) directly via Chainflip infrastructure.<ul><li>Dynamic interest rates based on pool utilisation</li><li>Oracle-based pricing via Chainlink for collateralisation</li><li>Soft and hard liquidations using native Chainflip swaps</li><li>Auto-collateralisation to reduce unnecessary liquidations</li><li>All liquidations routed through the DEX, adding volume and order flow</li></ul>This system positions Chainflip as the cross-chain equivalent of Aave, but with native BTC support and significantly improved capital efficiency through built-in swap markets.Introducing Chainflip Liquidity Lending (CLL)The second phase introduces short-term liquidity loans for market makers.By leveraging lending pools, LPs can borrow on demand to fill large swaps without holding all the required inventory. This significantly boosts protocol liquidity, increases trading capacity, and allows a small set of LPs to quote across many assets at once.CLL enables:<ul><li>Up to 4x capital efficiency</li><li>for LPs via on-demand credit</li><li>Real-time borrowing for swap fulfilment</li><li>Clearing house-style design to unlock deeper liquidity</li><li>Dynamic interest and clearance fees to incentivise passive capital</li></ul>This system aligns passive lenders and active market makers, improving execution speed, slippage, and capital utilisation—all with native BTC support.Protocol Revenue and TokenomicsWith projected demand between $100M to $5B in outstanding loans and protocol fees of 20–30%, Chainflip anticipates to generate $1M–$100M in new annual revenue, directly enhancing FLIP token value via buy-and-burn or staking rewards under FLIP 2.0 reforms.All lending fees—origination, interest, and liquidation—contribute to protocol revenue.A Major Leap for Cross-Chain DeFiChainflip’s lending products will open up major opportunities:<ul><li>Wallets and DeFi apps to offer native BTC lending via API</li><li>Aggregators to quote deeper liquidity with faster settlement</li><li>Passive capital to earn yield while improving swap reliability</li><li>No bridges, no wrapped tokens, no custodians</li></ul>“With native BTC swaps, lending, and liquidity all in one systemintegrated into Chainflip, we’re hoping to redefine what’s possible in decentralised finance,” said Harman.Rollout Timeline<ol><li>Phase 1: Generalised Lending (CGL) – Gradual rollout with limited caps, starting Q3 2025</li><li>Phase 2: Chainflip Liquidity Lending (CLL) – LP integration, deeper swap capacity, Q4 2025</li><li>Phase 3: Guarded Vaults – Optional cold vault system for enhanced TVL security, post-launch consultation</li></ol>About ChainflipChainflip is a decentralised cross-chain swapping protocol that enables seamless, noncustodial swaps between native assets like BTC, ETH, SOL, and USDC. Powered by a 100-of-150 validator threshold signature network, it combines intent-based execution with smart liquidity routing, giving users and builders access to real native assets without wrapped tokens or bridges.Learn more at:<a href="https://chainflip.io/" rel="noopener noreferrer nofollow"> chainflip.io</a>

Chainflip to Introduce Native BTC Lending and Cross-Chain Liquidity Loans, Opening a New Era for DeFi

Bitwire

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