TLDR: The vault is a 1/2 multi-sig between you and the smart contract, which means you always have full control over the funds in your vault, even if Liquidium or ICP were to go down.
In case you'd want to access the vault outside of Liquidium, the vault's public key and your own private key is everything you need to have full control.
What is the ICP Signing Layer and Why Is It Important?
The ICP signing layer is a key component used exclusively to activate your loan. It has already handled billions of dollars in native volume, making it a trusted, battle-tested solution. Once your loan is activated via ICP, the system transitions to our standard multisig plus DLC (Discrete Log Contracts) setup that Liquidium currently employs. A deep dive on DLC's can be found here.
Rest assured, the ICP activation module will be open-sourced soon and is currently undergoing a comprehensive audit.
How Are My Funds Secured?
Your funds are held in your personal vault—a 1/2 multisig Bitcoin address. This means that both you and ICP hold one key each, allowing either party to authorize a transaction. In practical terms, you always have the ability to move your funds, regardless of what happens with ICP or the underlying smart contract.
Is It Safe to Deposit Funds via ICP?
Yes! When you activate a loan, you engage with our secure ICP activation process that functions similarly to Odin’s Bifrost bridge. Funds are protected using a special type of Multi-Party Computation (MPC) called threshold signing (TSS). With TSS, a decentralized network of nodes—each holding a unique private key share—collectively authorizes transactions, ensuring that assets can be received and sent securely at any time. This robust mechanism is trusted by protocols like Arch, Near, and ICP itself.
Once a loan is activated, your collateral transitions to Liquidium’s standard multisig plus DLC escrow setup.
What is My Public Key and How Do I Use It?
Your public key is the Bitcoin public key associated with your 1/2 multisig vault. It acts as your vault’s “account number” and is essential for managing your funds:
Security: The public key is safe to share since it does not grant spending rights.
Withdrawal: You must save your public key because it is required to authorize any withdrawals from your vault.
Transparency: It allows anyone to verify transactions related to your vault without compromising its security.
How Is On-Chain Verification Achieved?
We utilize a native ICP Rune Indexer provided by the Omnity Network team—excellent engineers pushing what's possible for Bitcoin applications. This tool verifies collateral and loan values entirely on-chain, ensuring:
Transparency: All data is publicly verifiable.
Accuracy: Loan terms and collateral values are based on real-time, on-chain information.
How Does Oracle Integration Work and Ensure Accurate Pricing?
Liquidium partners with Chainsight, an ICP-native oracle builder. Chainsight aggregates outcalls to multiple endpoints, ensuring that the pricing data used for setting loan parameters is both secure and accurate. This specialized approach maintains the integrity of our pricing system and provides an extra layer of reliability.
Do I Need to Interact Directly with ICP?
No—you don't have to worry about handling ICP directly. Moreover, Liquidium abstracts all interactions with ICP. Your role is simply to sign messages to initiate your loan, while both ICP and Liquidium take care of the complex processes behind the scenes.
How Secure and Decentralized Is the System?
Our platform is built on a robust, decentralized architecture:
Proven Security: With billions in native ICP volume and your personal 1/2 multisig vault, your funds remain secure.
Continuous Improvement: We’re constantly exploring and implementing new ways to enhance security and decentralization, ensuring that Liquidium stays at the forefront of innovation.