Using SolvBTC as collateral to borrow
You want cash or stablecoins but don’t want to sell your Bitcoin. Borrowing against SolvBTC lets you keep the exposure while unlocking liquidity. The trade-off is liquidation risk — so it pays to understand the mechanics before you open a position.
Borrowing against SolvBTC takes place in DeFi lending markets (money markets) that accept it as collateral, not as a Solv-native feature. The exact terms — which assets you can borrow, the limits, the interest — are set by whichever market you use. Always read that market’s own documentation.
The basic idea
You deposit SolvBTC as collateral and borrow a different asset against it. Your Bitcoin exposure stays intact through the SolvBTC you still own; you simply have a loan sitting against it. Pay the loan back (plus interest) and your collateral is freed. The catch: if your collateral’s value falls too far relative to your debt, the market can sell part of it to protect the lender. That forced sale is a liquidation.
Three numbers that decide everything
| Term | What it means | Why it matters |
|---|---|---|
| Loan-to-value (LTV) | How much you’ve borrowed versus the value of your collateral. | Higher LTV = less cushion before liquidation. |
| Liquidation threshold | The LTV level at which your position becomes eligible for liquidation. | Cross it and part of your collateral can be sold automatically. |
| Health factor | A single number summarising how safe your position is. | As it approaches the danger zone, you’re close to liquidation. |
A worked example
Suppose SolvBTC you deposit is worth 10,000 units of value and the market lets you borrow up to 60% against it. You borrow 4,000 — a comfortable starting LTV of 40%. Now Bitcoin’s price drops 25%. Your collateral is worth 7,500, but your debt is still 4,000, so your LTV has jumped to about 53%. Keep falling and you approach the liquidation threshold. The lesson: your safety margin shrinks as the collateral price falls, even though you didn’t touch the loan.
How to borrow more safely
- Borrow well below the limit. Just because you can borrow 60% doesn’t mean you should. A conservative LTV leaves room for normal Bitcoin volatility.
- Watch the health factor. Set yourself a personal line well above the liquidation point and act before the market does.
- Keep a repayment buffer. Holding some of the borrowed asset (or spare collateral) lets you top up or repay quickly if prices move against you.
- Mind the interest. Borrow rates are variable. A position that looks fine today can drift if rates climb and you ignore it.
- Account for layered risk. If your collateral is a yield-bearing LST rather than base SolvBTC, you carry the strategy’s risk and the borrowing risk at once.
Liquidation is how lending markets stay solvent. It will happen automatically if your position crosses the threshold, often with a penalty on top. Nobody warns you in the moment. Managing the position is entirely your responsibility.
Is borrowing right for you?
Borrowing against Bitcoin suits people who have a clear use for the liquidity and a plan to manage the position actively. If you just want passive yield and no liquidation risk, the depositor guide path — holding SolvBTC or a liquid staking token — is simpler. Either way, read risks & liquidations in full.
Related: Risks & liquidations · Glossary