Bitcoin Loan Comparison

Lava vs. Unchained

Lava charges 6.5%–7.5% APR with a 2% annual capital charge using distributed-key custody (institutional custodians). Unchained charges 14.18% APR with a 2% origination fee using collaborative multisig (2-of-3). See the full breakdown of rates, thresholds, and custody risk below.

Terms checked individually — Lava: 2026-08-28; Unchained: 2026-05-14.

How do Lava and Unchained compare for Bitcoin-backed loans?

For the standardized $250,000, 50% LTV, 12-month scenario, Lava is 6.5% APR and Unchained is 14.18% APR. Unchained: 12-month loan with 2% origination included in APR.

Lava charges a 2% annual fee (its “capital charge”) on the year's peak outstanding balance that recurs every year the line stays open, and Unchained's published APR already includes 2% origination fee.

On a $250,000 loan held for 12 months, Lava saves $13,662 in total first-year cost (interest plus applicable fees or charges).

From a custody perspective, Unchained presents lower counterparty risk with its collaborative multisig (2-of-3) model.

Lava vs. Unchained: Feature-by-Feature Comparison

Lava

Unchained

Interest Rate (APR)

6.5%Lava

14.18%

Pricing Basis

Loan size

12-month commercial loan

Fees / Charges

2% annual capital charge

2% origination fee

Max Starting LTV

60%Lava

50%

Margin Call Threshold

No published fixed threshold — warnings/notifications and Liquidation Protection are account-specific

67% LTVUnchained

Liquidation Threshold

Account-specific (model estimate: historically published 85% LTV)

83% LTV

Margin Call Window

No fixed window published; warnings/notifications apply

24 hoursUnchained

Custody Model

Distributed-key custody (institutional custodians)

Collaborative multisig (2-of-3)Unchained

Rehypothecation

Interest Payment

Capitalized

Monthly

Minimum Loan

$100Lava

$150,000

Cost on a $250,000 Loan: Lava vs. Unchained

To keep the comparison clean, both lenders are modeled at $250,000 principal, 50% starting LTV, and a 12-month term, using monthly-pay pricing where available. Lava pricing varies by loan size; Unchained pricing varies by 12-month commercial loan. Actual offers can differ when those inputs change.

Loan Size	Lava APR	Unchained APR	Lava Total Year-1 Cost	Unchained Total Year-1 Cost	Savings
$250,000	6.5%	14.18%	$21,788	$35,450	$13,662 with Lava

Assumptions: $250,000 principal, 50% starting LTV, 12-month term, and monthly-pay pricing where offered. Total year-1 cost includes annualized interest and fees, but does not add a fee again when the lender's published APR already includes it. Lava: 2% annual capital charge. Unchained: 2% origination fee — already included in APR. Terms checked individually — Lava: 2026-08-28; Unchained: 2026-05-14.

Custody and Collateral Security

Lava and Unchained take fundamentally different approaches to collateral custody. Lava uses distributed-key custody (institutional custodians). Your Bitcoin depends on the security and solvency of that custody arrangement and could be at risk in the event of a hack, insolvency, or regulatory action. Unchained uses collaborative multisig (2-of-3). Multiple key holders must coordinate to move funds, reducing single-point-of-failure risk but still requiring trust in the key coordination process.

Lava: High (Custodial)

•Distributed-key custody (institutional custodians)
•Rehypothecation: No
•Interest capitalized (compounding)
•The headline rate excludes Lava's 2% annual capital charge, applied to the year's largest outstanding balance — and unlike a one-time origination fee, it recurs every year the line stays open.

Unchained: Medium (Multisig)

•Collaborative multisig (2-of-3)
•Rehypothecation: No
•Monthly interest payments
•Commercial/institutional only since Jan 2024.

Margin Call and Liquidation: Lava vs. Unchained

Lava: No published fixed threshold — warnings/notifications and Liquidation Protection are account-specific. Positions liquidate at Account-specific (model estimate: historically published 85% LTV). Unchained triggers margin calls at 67% LTV and liquidates at 83% LTV. Unchained gives borrowers 24 hours to respond to a margin call. Lava has no mandatory margin-call step; no published fixed threshold — warnings/notifications and liquidation protection are account-specific.

Threshold	Lava	Unchained
Max Starting LTV	60%	50%
Margin Call	No published fixed threshold — warnings/notifications and Liquidation Protection are account-specific	67% LTV
Margin Call Window	No fixed window published; warnings/notifications apply	24 hours
Liquidation	Account-specific (model estimate: historically published 85% LTV)	83% LTV

Safety Buffer at Each Lender's Maximum Starting LTV

This comparison uses each lender's own maximum starting LTV, not a common 50% starting position. Lava: 25.0 percentage point modeled buffer between maximum starting LTV (60%) and liquidation (Account-specific (model estimate: historically published 85% LTV)). Unchained: 33.0 percentage point modeled buffer between maximum starting LTV (50%) and liquidation (83% LTV). Unchained provides a wider safety margin.

Which is better: Lava or Unchained?

Choosing between Lava and Unchained requires evaluating total cost, custody risk, and which platform aligns with your borrowing profile. Lava uses distributed-key custody (institutional custodians) with 6.5%–7.5% APR, while Unchained uses collaborative multisig (2-of-3) with 14.18% APR.

On the standardized $250,000, 50% LTV, 12-month scenario, Lava costs $21,788 in the first year versus $35,450 at Unchained, a difference of $13,662.

The custody difference is material. Unchained uses collaborative multisig (2-of-3), which means your Bitcoin requires multiple key holders to coordinate, reducing single-point-of-failure risk. Lava uses distributed-key custody (institutional custodians). That arrangement adds custody-provider and insolvency risk that a script-enforced DLC avoids.

Lava is the better fit for borrowers who need smaller loans or instant access. Unchained is the better fit for borrowers who are borrowing $150,000 or more and want collaborative key control.

Key details to be aware of: Lava: The headline rate excludes Lava's 2% annual capital charge, applied to the year's largest outstanding balance — and unlike a one-time origination fee, it recurs every year the line stays open. Interest compounds daily into the balance; the current-year capital charge does not itself accrue interest. Unchained: Commercial/institutional only since Jan 2024. Published pricing is 12% interest, 2% origination, and 14.

Frequently Asked Questions

Is Lava or Unchained cheaper for a $250,000 Bitcoin-backed loan?

Lava is cheaper under the stated assumptions. On a $250,000 loan at 50% LTV held for 12 months, Lava costs $21,788 (6.5% APR) while Unchained costs $35,450 (14.18% APR). That is a $13,662 difference in the first year.

How does Lava's custody model compare to Unchained?

Lava uses distributed-key custody (institutional custodians). Unchained uses collaborative multisig (2-of-3). Unchained presents lower custody risk because your collateral requires coordination among multiple key holders.

What is the minimum loan amount at Lava vs Unchained?

Lava's minimum loan is $100. Unchained's minimum is $150,000. Lava is more accessible for smaller borrowers.

What happens if Bitcoin drops while I have a loan with Lava or Unchained?

Lava publishes multiple warnings/notifications, but its liquidation and Liquidation Protection thresholds are account-specific; this comparison models liquidation using the historically published 85% LTV estimate. Unchained issues a margin call at 67% LTV with a 24-hour response window and liquidates at 83% LTV. For a common 50% starting LTV (rather than each lender's maximum), the modeled buffers are 35 points at Lava and 33 points at Unchained.

Should I use Lava or Unchained for a Bitcoin-backed loan?

It depends on your priorities. Lava (6.5%–7.5% APR, distributed-key custody (institutional custodians), min $100) is better for borrowers who value distributed-key custody (institutional custodians) and need smaller loan access. Unchained (14.18% APR, collaborative multisig (2-of-3), min $150,000) is better for borrowers who value collaborative multisig (2-of-3) and prefer this platform's lending structure. Use the rate table and cost comparison above to model your specific scenario.

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