Flow Traders has become an early institutional user of Lombard Finance’s new Bitcoin Onchain Credit Strategy, which allows borrowing stablecoins with Bitcoin deposits as collateral.
By using Lombard’s Bitcoin Earn vault, which has attracted over $1 billion from 38,500 users, Flow Traders can borrow stablecoins without posting direct onchain collateral. Instead, Bitcoin deposited by users acts as collateral coverage through Cap’s credit platform.
This setup ties the stablecoin borrowing demand from Flow Traders to Bitcoin holders seeking yield, who earn underwriting premiums alongside gains from vault returns. The mechanism uses Chainlink CCIP to move BTC.b tokens cross-chain from Avalanche to Ethereum, broadening access to the credit product.
Cap’s platform isolates collateral coverage per borrower, reducing risk by avoiding pooled collateral exposure. If loan safety falls below thresholds, delegated assets can be liquidated to repay debts. Lombard CEO Jacob Phillips noted this separation enables regulated institutional trading firms to access onchain credit for the first time.
Flow Traders, which has provided liquidity in digital asset markets since 2017, views this funding source as less sensitive to DeFi market swings. Bitcoin Earn operates as a managed meta-vault where users deposit various Bitcoin tokens and receive BTCe tokens representing their share. Professional managers diversify the pooled assets across multiple strategies, with this new credit allocation adding a fixed premium as a stable income stream.
