Chainflip to Introduce Native BTC Lending and Cross-Chain Liquidity Loans, Opening a New Era for DeFi

Associated Press

2 days ago

Chainflip, the decentralised cross-chain protocol that has processed over $3 billion in swap volume, today announced the upcoming launch of its most ambitious product vertical yet: Native Bitcoin Lending and Cross-Chain Liquidity Loans.
These upcoming systems, Generalised Lending (CGL) and Chainflip Liquidity Lending (CLL), will mark the first time that users can borrow and lend native BTC and other major crypto assets permissionlessly across chains without relying on wrapped tokens, bridges, or centralised intermediaries.
'This is one of the most important steps forward for Chainflip and for DeFi. Lending has always been missing a truly native cross-chain solution to service the BTC market. Chainflip is perfectly poised to blow that market wide open,' said Simon Harman, CEO of Chainflip Labs.
Solving a Core Problem in DeFi Lending
While DeFi lending has grown significantly on chains like Ethereum, most products that offer BTC lending rely on wrapped or bridged assets. This poses a serious limitation, as wrapping assets is often treated as a taxable sale, and existent wrapped BTC products, like WBTC or cbBTC are tied to centralised custodians.
Despite this, Aave currently holds over $4.3bn in WBTC collateral-showing the demand for BTC-collateralized loans is massive.
Chainflip will solve this by enabling true native BTC lending, directly from its threshold signature vaults, secured by a permissionless validator network. This native approach bypasses the need for wrapped tokens entirely.
Introducing Generalised Lending (CGL)
The first phase of the rollout, Generalised Lending, brings a familiar model to users: lend or borrow supported assets (BTC, ETH, SOL, USDC, USDT, etc.) directly via Chainflip infrastructure.
This system positions Chainflip as the cross-chain equivalent of Aave, but with native BTC support and significantly improved capital efficiency through built-in swap markets.
Introducing Chainflip Liquidity Lending (CLL)
The second phase introduces short-term liquidity loans for market makers.
By leveraging lending pools, LPs can borrow on demand to fill large swaps without holding all the required inventory. This significantly boosts protocol liquidity, increases trading capacity, and allows a small set of LPs to quote across many assets at once.
CLL enables:
This system aligns passive lenders and active market makers, improving execution speed, slippage, and capital utilisation-all with native BTC support.
Protocol Revenue and Tokenomics
With projected demand between $100M to $5B in outstanding loans and protocol fees of 20-30%, Chainflip anticipates to generate $1M-$100M in new annual revenue, directly enhancing FLIP token value via buy-and-burn or staking rewards under FLIP 2.0 reforms.
All lending fees-origination, interest, and liquidation-contribute to protocol revenue.
A Major Leap for Cross-Chain DeFi
Chainflip's lending products will open up major opportunities:
'With native BTC swaps, lending, and liquidity all in one system
integrated into Chainflip, we're hoping to redefine what's possible in decentralised finance,' said Harman.
Rollout Timeline
About Chainflip
Chainflip is a decentralised cross-chain swapping protocol that enables seamless, noncustodial swaps between native assets like BTC, ETH, SOL, and USDC. Powered by a 100-of-150 validator threshold signature network, it combines intent-based execution with smart liquidity routing, giving users and builders access to real native assets without wrapped tokens or bridges.
Learn more at: chainflip.io