Lygos Finance revealed what it calls the first truly non-parenting authority Bitcoin -Backed lending platform aimed at transforming Crypto Credit Market with institutional quality design.
The platform is built on discreet log contracts (DLCS) Developed by Atomic Finance, which Lygos acquired earlier this year.
DLCs enforce bilateral loan agreements directly on Bitcoin’s base layer, with an external Oracle that testifies to facts such as BTC-USD prices but do not control the funds. Borrowers and lenders sign transactions of contract execution, which means that settlement takes place completely on Bitcoin Blockchain without custodians or smart contract risk.
“Real non-parenting authority means exactly this,” CEO Jay Patel said in an email message on Thursday. “No participant other than the borrower and lender can move the funds.”
Lygos supports up to $ 100 million, with BTC fitted in a native 2-of-2-script and USDC/USDT issued at Ethereum. The model avoids wrapped Bitcoin or synthetic collateral that holds custody on both sides of the transaction.
During the 2021 Crypto Bull market, centralized lenders such as Celsius Network, Voyager Digital and Blockfi billions drew in deposits by promising high dividends. But these returns were often built on risky, interconnected loans.
The system was revealed in 2022 when the collapse of the terra-luna stablecoin and hedge fund’s bankruptcy Three Pile Capital (3AC) Left many of the largest lenders exposed. Mass extraction followed and forced companies to freeze assets and fil for bankruptcy. Customers lost much of their deposited funds, and reputation to Bitcoin loan got a serious hit.
By enforcing agreements directly on Bitcoin Layer 1, Lygos said it can restore confidence in transparent, enforceable contracts and no dependence on deputies. The debut marks a new attempt to reimagine Bitcoin credit markets, this time with non-parenting authority.
