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How To Borrow Against Runes?
How To Borrow Against Runes?
Robin avatar
Written by Robin
Updated over 6 months ago

Note: You don't need the actual Rune batch you are borrowing against. As long as you have more Runes than the desired batch size you want to borrow against, you you are good to go. Liquidium will automatically split the UTXOs for you.

Note: Unisat wallet is available for runes lending and borrowing.

How do I borrow Bitcoin using my Runes?

  1. Find a Rune project: Visit the Borrow page and locate a rune that you own and click “Borrow”.

  2. Select your Rune: Choose your desired Rune batch to use as collateral. The terms will be displayed.

  3. Choose Desired Transaction Speed: Pick between Low, Medium, and High speed in sats/vB or click on the pencil in the top right, to set your desired fee amount. After that click on "Continue".

  4. Confirm in the wallet

    There are 2 ways on how offers can be accepted:

    1. Way 1: Accept offer bundle, if there's more than one loan offer within 2% range of the loan amount, you will be given the option to accept whichever offer is signed first. Wait for the wallet to pop up and hit the "Confirm" button 2x-3x to confirm in the wallet.

    2. Way 2: Accept standalone best offer, if there's no more than one loan offer within 2% range of the loan amount. Wait for the wallet to pop up and hit the "Confirm" button to confirm in the wallet.

  5. Await Lender's Approval: The lender has to sign and broadcast the transaction to start the loan. The lender must manually start the loan due to Bitcoin's technical structure.

  6. Loan Starts: Once initiated by the lender, you will be notified, the loan begins, and you can monitor it under “Borrowing” on your Portfolio page.

Note: While borrowing via the "Borrow" button, you will always select the best offer(s) by default.

How can I choose between specific loan offers?

You can choose between specific loan offers, if you don't want to accept the best loan offer by default.

  1. Find a Rune project: Visit the Borrow page and locate a Rune project that you own a Rune from and click “Offers”.

  2. Select the batch size: Select the desired batch size, you want to borrow against.

  3. Select the desired loan amount: Select the desired loan amount out of the offer book, by clicking on "Borrow".

  4. Select your Rune: Choose your desired Rune to use as collateral. The terms will be displayed.

  5. Choose Desired Transaction Speed: Pick between Low, Medium, and High speed in sats/vB or click on the pencil in the top right, to set your desired fee amount.

    After that click on "Continue".

  6. Confirm in the wallet: Wait for the wallet to pop up and hit the "Confirm" button to confirm in the wallet.

  7. Await Lender's Approval: The lender has to sign and broadcast the transaction to start the loan. The lender must manually start the loan due to Bitcoin's technical structure.

  8. Loan Starts: Once initiated by the lender, you will be notified, the loan begins, and you can monitor it under “Borrowings” on your Portfolio page.

How can I cancel a loan request?

Cancel your loan request in the "Pending" section of your Portfolio page, before the lender initiates the loan.

Note: Once the lender has signed the loan, neither the borrower nor the lender can cancel the loan anymore.

How do I repay my loan?

  1. Go to your Portfolio page.

  2. Locate your active loan under the section "Borrowing", click on "Repay" and choose your desired fee rate (Low, Medium, High) or select your custom fee rate by clicking on the pencil in the top right, to set your desired fee amount.

  3. Click "Repay".

  4. Confirm and sign the transaction in your wallet.

  5. If you want to speed up the repaying transaction, have a look here: How to speed up a transaction (CPFP).

  6. The runes will be on the way to you, there is no unlock necessary.

Note: You will need to wait for the repayment to be confirmed after that the Runes will be on the way to you.

What if my loan defaults?

In case of default (non-repayment), the collateral Runes transfer to the lender, but you retain the borrowed Bitcoin.

How long do I have to wait for my loan?

The waiting period for your loan to start depends largely on the lender's response time. Once you accept a loan offer, the lender is notified immediately. Some lenders are online and can start the loan right away, while others may be away from their devices and take longer to initiate the loan process.

If the lender does not respond for an extended period, you have the option to cancel the loan request and accept a different offer. However, we recommend waiting at least 8 hours before taking such action to provide ample time for the lender to respond and start the loan.

How can I check if my pending transaction will confirm?

Check the current fee rates on mempool.space. If your effective fee rate is equal or higher than the current fee rate in the mempool, your transaction will be confirmed soon.

If one or multiple UTXOs that were allocated for the loan were being spent before the loan started, the lender needs to rebuild the loan and the borrower must sign the transaction again. The lender should wait for the borrower to sign again. Once the borrower signs, the loan starts.

Note: Wallets are currently not displaying who pays the network fees, but it will always be the borrower.

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