TL;DR
- Lava launched its Bitcoin Line of Credit (BLOC) and closed a $200 million funding round combining venture capital and debt.
- The product offers revolving loans with a fixed 5% interest rate and a 2% annual fee on the highest balance, bringing the total cost to around 7%.
- Loans can reach up to 50% of the user’s BTC value and include automatic collateral protection to prevent liquidations.
Lava, a platform specializing in Bitcoin-collateralized lending, has closed a new $200 million funding round and unveiled its flagship product, the Bitcoin Line of Credit (BLOC). The company aims to provide instant dollar liquidity without requiring users to sell their BTC, lowering financing costs for those managing wealth in the crypto ecosystem.
The funding combines venture and debt capital and brings in investors Anthony Pompliano and Eric Jackson, founder of EMJ Capital. Both joined to support Lava’s expansion in building Bitcoin-based financial tools. According to Jackson, the company’s revolving credit model is the first of its kind and offers the lowest borrowing rates in the market.
How the Credit Line Works
The new credit line operates as a revolving account: users can borrow, repay, and borrow again without resetting the loan, paying interest only on the amount actually used. Lava set a fixed annual rate of 5%, reviewed every twelve months, plus a 2% fee on the highest balance reached during the year. This structure brings the total annual cost to about 7%, significantly below the average rate for crypto-backed loans.
Lava Connects Market Liquidity Through Bitcoin
Loans can reach up to 50% of the total USD value of each user’s Bitcoin balance within the app. Unlike traditional systems, Lava does not require personal information for most of its financial products and grants immediate access to funds. The platform also integrates an automatic protection mechanism that adds BTC as collateral when the asset’s price drops, reducing liquidation risk.
CEO Shehzan Maredia stated that the company’s goal is to deliver the best borrowing experience for Bitcoin holders, combining flexibility and security with competitive rates. He added that BLOC is the most requested product from the community and will be the company’s core focus going forward. With the backing of its new investors, Lava aims to build a BTC-based credit system that bridges crypto market liquidity with the needs of the traditional financial ecosystem.
