Understanding the Bitcoin Line of Credit (BLOC)
The Bitcoin Line of Credit (BLOC) allows you to access immediate liquidity by borrowing against your Bitcoin holdings without triggering a taxable sale. This product is designed for holders who wish to maintain long-term exposure to Bitcoin price appreciation while unlocking the purchasing power of their assets for flexible use.
At a Glance
| Feature | Details |
|---|---|
| Collateral Type | Bitcoin (BTC) |
| Credit Check | None Required |
| Approval Time | Instant |
| Tax Status | Non-Taxable Event (Borrowing) |
| Risk Factor | Liquidation Risk Applies |
How it Works
The BLOC operates as a demand credit line secured solely by your BTC. Unlike traditional bank loans, there are no income verifications or credit score requirements because the loan is fully collateralized. When you deposit Bitcoin into the BLOC protocol, you can draw funds in stablecoins or fiat up to the fixed 50% Loan-to-Value (LTV) limit.
As long as the value of your Bitcoin remains above the liquidation threshold, you can keep the credit line open indefinitely. However, if the market price of Bitcoin drops significantly, you must either add more collateral or repay a portion of the loan to avoid a partial or total liquidation of your assets.
Product Options
The BLOC offers a streamlined borrowing experience where the interest cost is the primary variable based on your loyalty status:
- Liquidity Access: Draw funds whenever needed and repay at your own pace.
- Flexible Repayment: No fixed monthly installments; interest is calculated based on the outstanding balance.
- Loyalty Integration: Hold PRN tokens to access significantly lower annual interest rates while maintaining high capital efficiency.
Loyalty Tiers and Terms
While the standard borrowing limit is 50% LTV, your interest costs are significantly reduced as your PRN Loyalty Level increases—and users can further lower their APR by over-collateralizing their positions to unlock the Lowest Rates.
| Loyalty Level | Starting Rate (APR) | Lowest Rate (APR) |
|---|---|---|
| Basic | 13% | 9% |
| Silver | 12% | 8% |
| Gold | 11% | 7% |
| Diamond | 9% | 5% |
Asset Integrity and Internal Protocol
Every transaction performed through the BLOC is governed by a strict 1:1 reserve policy. People's Reserve prioritizes the safety of your collateral through institutional-grade protocols:
- No Rehypothecation: Your Bitcoin is never lent out to third parties or used for platform leverage. It remains 1:1 backed in secure storage.
- Verified Reserves: All collateral holdings are audited against the platform's cold storage to maintain solvency and transparency.
- Instant Transparency: Collateral levels are monitored in real-time, and users receive automated alerts if their LTV approaches the margin call zone.