On April 14, Startup Atomic Loans announced the launch of its Bitcoin-based decentralized finance (DeFi) product while raising $2.45 million in seed funding led by Initialized Capital and with participation from ConsenSys, Morgan Creek Digital and Joe Lallouz and Aaron Henshaw from Bison Trails.
Users can deposit Bitcoin and and take out DAI and USDC loans. The platform works in a similar way like that of MakerDAO or Compound. A borrower must lock up his BTC collateral in a special multi-signature contract on the Bitcoin blockchain.
14/14 Lastly, we’re announcing the public of our mainnet beta for the borrowing side of the protocol. Simply go to https://t.co/u2zfevp1cg, click “Borrow”, and get started on a non-custodial Bitcoin-backed loan today! Read more here 👇https://t.co/gfN7a6nf7P — Atomic Loans (@Atomic_Loans) April 14, 2020
Source: Atomic Loans
Instead of storing BTC when issuing loans, Atomic Loans locks the bitcoin collateral in a non-custodial escrow. When borrowers repay their loans, those coins locked in the escrow will be released and returned to the borrowers.
The lack of complex smart contract scripting has traditionally been a serious challenge to bringing any kind of lending or DeFi product to Bitcoin.
Usually, Ethereum is known as the major player in DeFi products, although Bitcoin have its own native DeFi arena too. Atomic Loans seeks to strengthen the Bitcoin DeFi sector with the launch of its Bitcoin DeFi platform as a public mainnet beta.