How Borrow Works

Borrow by Sats Terminal allows users to access stablecoins by using bitcoin as collateral.

The process is designed to be simple and straightforward, with the platform handling the more complex steps in the background.

1. Registration & Wallet Setup

Users begin by signing up with an email address. No KYC or personal identification is required.

When signing in:

• A self-custodial wallet is created for the user.

• The wallet is secured through Privy’s authentication system, which allows users to access their assets without managing private keys directly.

• The wallet can authorize certain automated actions (such as supplying collateral) while ensuring the user remains in full control.

This setup allows users to borrow against BTC without installing a separate wallet or managing seed phrases.

2. Loan Configuration

Users choose how much BTC they want to use as collateral or how much stablecoin they want to borrow.

Borrow then checks supported lending providers and displays the loan options currently available.

Each loan option includes:

• the estimated interest rate

• any associated fees

• the amount of stablecoins the user will receive

• the required collateral and LTV

After reviewing the available choices, the user selects the option that best suits their needs.

Example: A user may choose to borrow 50% of the value of the BTC they deposit as collateral giving them a 50% LTV.

3. Deposit Bitcoin

Borrow provides a unique Bitcoin address for the user’s collateral deposit. The user sends BTC to this address directly from their own wallet.

After the transaction is submitted for confirmation on the Bitcoin network, Borrow waits for the required confirmations before continuing the process automatically.

The system tracks confirmations in real time to ensure secure processing.

At each stage, the app provides transparency so users can track the status of their collateral.

4. Processing Collateral (Handled Automatically)

After the BTC deposit is confirmed, Borrow handles the required steps to prepare the collateral for the selected loan.

This may include:

• moving the BTC to the network used by the lending provider

• supplying the collateral to that provider

• initiating the stablecoin loan

All of these actions happen automatically in the background. The user does not need to manage wrapping, bridging, or smart contract interactions themselves.

Once the collateral is supplied, the stablecoins are issued to the user’s wallet.

5. Receive Stablecoins

Once the collateral has been supplied to the lending provider, the borrowed stablecoins are sent to the user’s self-custodial wallet.

From there, users can:

• hold their stablecoins,

• send them to another wallet and/or off-ramp to fiat, or

• use them within supported products on the platform.

The stablecoins remain fully controlled by the user at all times.