There is a heavily underestimated gold mine in the ecosystem—the on-chain Bitcoin lending strategy. If you are a Bitcoin believer, you should have deep experience with this issue: holding plenty of BTC but unable to spend U, or watching opportunities slip away during a sharp decline.

Selling coins? Don’t even think about it. At this moment, the Lista protocol acts like your "on-chain private bank," solving this dilemma.

**Why mortgage Bitcoin on Lista?**

First, it’s about capital utilization. Lista offers a relatively friendly collateralization rate for on-chain Bitcoin—you can mortgage your Bitcoin and directly borrow stablecoins. This mechanism is cleverly designed—allowing your Bitcoin to retain ownership while generating liquidity.

**Three practical scenarios**

Suppose you urgently need 10,000 U for liquidity. The most conventional approach is to mortgage 0.5 on-chain Bitcoin, borrow 10,000 stablecoins, and then withdraw to your wallet. You avoid selling coins, sidestepping capital gains tax, and don’t lose ownership of your Bitcoin. When you’re financially comfortable again, buy back stablecoins to repay the loan and redeem your Bitcoin. If Bitcoin’s price rises during this period, you earn more—this is the so-called "lossless liquidity."

A more aggressive tactic is bottom-fishing. When the market crashes and Bitcoin hits support levels, what if you have no U? Simply mortgage your on-chain Bitcoin, borrow stablecoins, and buy more Bitcoin with the proceeds. This is the most hardcore "coin-based compound interest"—leveraging your position while maintaining control over the underlying asset.

Another approach is periodic cash-out. If you prefer not to operate frequently, you can mortgage part of your Bitcoin and steadily borrow stablecoins for daily expenses. This meets your living needs while allowing your Bitcoin to continue enjoying bull market gains.

**Risks to be aware of**

Bitcoin’s volatility far exceeds that of stablecoins, so the health factor of borrowing must stay above 1.5. This is not an exaggeration—during increased volatility, the ratio can quickly decline. Never risk your core assets just to borrow a little more; doing so is like playing with fire in a casino.

The truly smart way is to treat lending protocols as liquidity buffers, not as leverage gambling. Use this tool well, and your Bitcoin will no longer be a "digital antique" in a cold wallet but an active asset continuously providing cash flow.

The demand for collateral in this hard currency is the core driver supporting the entire ecosystem’s value. Understanding this, you grasp the essence of DeFi lending.