Protocol & Network Risk

Borrow interacts with on-chain systems and, in some cases, multiple blockchain networks depending on the lender you select.

These systems carry distinct risks and operational considerations that are important to understand.

Bridging between networks

Some lenders operate on networks outside the Bitcoin blockchain. When a loan requires collateral to be used on another network, Borrow may bridge assets as part of the process.

Bridging introduces certain considerations:

• it relies on infrastructure that connects different blockchain networks

• network delays or congestion may affect processing times

• all bridging systems carry inherent technical risk, including potential vulnerabilities

Borrow only performs bridging when required for the loan you choose. Bridging steps are presented clearly so you can track progress in real time.

Smart-contract protocol risk

When you select a non-custodial lender, the loan is managed through that lender’s smart contracts.

As with any on-chain system:

• smart contracts may contain bugs or unintended behavior

• protocol governance and design choices can influence risk

• market conditions may affect liquidity and repayment

These risks apply to all smart-contract systems.

Borrow’s approach

Borrow aims to simplify interactions with on-chain systems while maintaining transparency:

• bridging and protocol steps are automated when needed

• each step is shown in the interface

• no actions occur without your approval

Borrow does not remove protocol or network risk, but the platform makes these processes visible so you understand how your collateral is being handled.