> For the complete documentation index, see [llms.txt](https://docs.bima.money/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.bima.money/vault/borrowing-terms.md).

# Borrowing Terms

## The terms

| Parameter               | Value                                  |
| ----------------------- | -------------------------------------- |
| **Collateral**          | Tokenised BTC, WBTC, cbBTC and similar |
| **Loan asset**          | USDC                                   |
| **Loan-to-value (LTV)** | 50%                                    |
| **Interest rate**       | 0%                                     |
| **Deposit window**      | 7 days                                 |
| **Loan duration**       | 12 months, fixed                       |
| **Downside**            | Protected below the put strike         |
| **Upside**              | Retained up to the call strike         |
| **Redemption delay**    | 7–15 days after repayment              |
| **Liquidations**        | None                                   |
| **Early withdrawal**    | Not available                          |

## What 50% LTV at 0% means

<figure><img src="https://1150339483-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FuV0XpSBB66aR52DO5D6k%2Fuploads%2FMgvBFVsfoaaJ14Dayi5w%2Fltv-example.svg?alt=media&amp;token=dad1220c-fee4-46ab-8d64-9c7aa1ffc311" alt=""><figcaption></figcaption></figure>

Deposit 1 BTC at $100,000 and you can claim $50,000 USDC. Twelve months later you repay $50,000. No interest has accrued in between.

The conservative LTV is part of why no liquidation mechanism is needed: the loan sits well below the collateral value, and the collar bounds how far that value can fall.

## Your repayment is fixed

**You repay what you claimed, and nothing more.**

|                                         |              |
| --------------------------------------- | ------------ |
| You claimed                             | $50,000 USDC |
| Interest over the term                  | $0           |
| BTC at $150,000 at maturity → you repay | $50,000      |
| BTC at $100,000 at maturity → you repay | $50,000      |
| BTC at $60,000 at maturity → you repay  | $50,000      |

The repayment never grows with the BTC price, and no rate can move against you.

## Three outcomes

<figure><img src="https://1150339483-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FuV0XpSBB66aR52DO5D6k%2Fuploads%2FwpKWk1yM89hNwpm4Td5Q%2Foutcome-scenarios.svg?alt=media&amp;token=62867b77-fca5-43e8-a0dc-a41f65db1c7e" alt=""><figcaption></figcaption></figure>

<details>

<summary>BTC finishes above the call strike.</summary>

You keep every dollar of gain up to the strike. Above it, the upside funds the financing. This is the case where you would have done better holding — and it is the price of the 0%.

</details>

<details>

<summary>BTC finishes between the strikes.</summary>

Full participation. You keep the whole gain or wear the whole fall, receive all your collateral back, and the financing cost you nothing at all.

</details>

<details>

<summary>BTC finishes below the put strike.</summary>

Protection applies and your loss stops tracking Bitcoin down. Not a guarantee of your capital — the fall between your deposit price and the put strike is still yours.

</details>

See [What Is a Collar?](broken://pages/e80d3b30415b743dd36ac7ada599a8484729567d) for the full payoff.

## Fees

See [Fees and Revenue](file:///8003494/operations/fees-and-revenue.md) for the current fee schedule.

## The constraints

The system enforces these and they cannot be waived:

* One vault per month
* A fixed 50% borrowing ratio no custom LTV
* Strike levels set per vault, not per user
* No early withdrawal
* Delayed redemption after repayment