Kevin Bell, CFA
President, Cadena Bitcoin
Cadena Bitcoin is a non-custodial lending and borrowing product where users lock Bitcoin collateral in a Discreet Log Contract (DLC) to facilitate loans. Here’s a breakdown of the key actions:
A user (Initiator) posts an offer on Cadena Bitcoin, locking collateral and specifying interest rate. Terms like loan size, contract tenor, loan to value, and currency (USD) are fixed at the product level.
Peer accepts the offer, locking in their collateral and forming a contract.
The on-chain DLC holds users’ collateral, provides change, and covers Cadena Bitcoin’s service fee.
At maturity, the Oracle’s attestation determines the contract outcome. A single Contract Execution Transaction (CET) is broadcast, splitting the locked collateral based on the BTCUSD price.
Each Cadena Bitcoin contract lasts 30, 90, 180, or 365 days starting when the contract is accepted. Duration may extend slightly to align with the next available Oracle attestation after maturity.
Simple interest using a 30/360-day count convention (commonly used in USD debt). No compounding. For tenors shorter than 1 year, the 360-day basis understates the true rate compared to a 365-day base.
Base loan value is 0.1 BTC.
Lender contribution: Base Loan / (1.0 + interest / 100)
Borrower Loan: Borrower provides 0.1 BTC plus 0.50% service fee minus lender’s contribution.
Settlement: A single Contract Execution Transaction (CET) splits collateral based on BTCUSD price at maturity.
All transactions are on-chain secured by Discreet Log Contracts and settled with a single execution based on a trusted Oracle price feed.
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