Bitcoin Loan Comparison

Lygos vs. Lava

Lygos charges 10% APR with $0 origination fees using non-custodial (DLC). Lava charges 6.5%–7.5% APR with a 2% annual capital charge using distributed-key custody (institutional custodians). See the full breakdown of rates, thresholds, and custody risk below.

Terms checked individually — Lygos: 2026-09-29; Lava: 2026-08-28.

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

For the standardized $250,000, 50% LTV, 12-month scenario, Lygos is 10% APR and Lava is 6.5% APR. Lygos: 50% LTV · 12-month term.

Lava charges a 2% annual fee (its “capital charge”) on the year's peak outstanding balance that recurs every year the line stays open — a fee that raises the effective cost above the headline rate from the day you borrow. Lygos charges no origination or processing fees — interest is the only cost.

On a $250,000 loan held for 12 months, Lava saves $3,212 in total first-year cost (interest plus applicable fees or charges).

From a custody perspective, Lygos presents lower counterparty risk with its non-custodial (DLC) model.

Lygos vs. Lava: Feature-by-Feature Comparison

Lygos

Lava

Interest Rate (APR)

10%

6.5%Lava

Pricing Basis

Flat rate

Loan size

Fees / Charges

$0Lygos

2% annual capital charge

Max Starting LTV

70%Lygos

60%

Margin Call Threshold

At-risk alert at 80%; no mandatory call

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

Liquidation Threshold

90% LTV

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

Margin Call Window

No margin-call window

No fixed window published; warnings/notifications apply

Custody Model

Non-custodial (DLC)Lygos

Distributed-key custody (institutional custodians)

Rehypothecation

Interest Payment

Monthly

Capitalized

Minimum Loan

$25,000

$100Lava

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

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. Lygos pricing varies by flat rate; Lava pricing varies by loan size. Actual offers can differ when those inputs change.

Loan Size	Lygos APR	Lava APR	Lygos Total Year-1 Cost	Lava Total Year-1 Cost	Savings
$250,000	10%	6.5%	$25,000	$21,788	$3,212 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. Lygos: $0 origination fee. Terms checked individually — Lygos: 2026-09-29; Lava: 2026-08-28.

Custody and Collateral Security

Lygos and Lava take fundamentally different approaches to collateral custody. Lygos uses non-custodial (DLC). Your Bitcoin is locked on the Bitcoin blockchain in a smart contract. Neither Lygos nor any third party can access or move your collateral. 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.

Lygos: Low (Non-Custodial)

•Non-custodial (DLC)
•Rehypothecation: No
•Monthly interest payments

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.

Margin Call and Liquidation: Lygos vs. Lava

Lygos: At-risk alert at 80%; no mandatory call. Positions liquidate at 90% LTV. Lava: No published fixed threshold — warnings/notifications and Liquidation Protection are account-specific. Positions liquidate at Account-specific (model estimate: historically published 85% LTV).

Threshold	Lygos	Lava
Max Starting LTV	70%	60%
Margin Call	At-risk alert at 80%; no mandatory call	No published fixed threshold — warnings/notifications and Liquidation Protection are account-specific
Margin Call Window	No margin-call window	No fixed window published; warnings/notifications apply
Liquidation	90% LTV	Account-specific (model estimate: historically published 85% 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. Lygos: 20.0 percentage point modeled buffer between maximum starting LTV (70%) and liquidation (90% LTV). Lava: 25.0 percentage point modeled buffer between maximum starting LTV (60%) and liquidation (Account-specific (model estimate: historically published 85% LTV)). Lava provides a wider safety margin.

Which is better: Lygos or Lava?

The choice between Lygos and Lava comes down to three factors: total cost, custody architecture, and who the platform is designed for. Lygos serves borrowers from $25,000 to $100M with a single transparent rate and non-custodial DLC security. Lava serves a broader range starting from $100, using distributed-key custody (institutional custodians).

On the standardized $250,000, 50% LTV, 12-month scenario, Lava costs $21,788 in the first year versus $25,000 at Lygos, a difference of $3,212.

The custody difference is material. Lygos uses non-custodial (DLC), which means your Bitcoin is locked on the Bitcoin blockchain in a smart contract where no party can access it. Lava uses distributed-key custody (institutional custodians). That arrangement adds custody-provider and insolvency risk that a script-enforced DLC avoids.

Lygos is the better fit for borrowers who prioritize non-custodial security, want a single transparent rate, and are borrowing $25,000 or more. Lava is the better fit for borrowers who need smaller loans or more flexible access.

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.

Frequently Asked Questions

Is Lygos or Lava 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, Lygos costs $25,000 (10% APR) while Lava costs $21,788 (6.5% APR). That is a $3,212 difference in the first year.

How does Lygos's custody model compare to Lava?

Lygos uses non-custodial (DLC). Lava uses distributed-key custody (institutional custodians). Lygos presents lower custody risk because your collateral is locked on the Bitcoin blockchain where no party can access it.

What is the minimum loan amount at Lygos vs Lava?

Lygos's minimum loan is $25,000. Lava's minimum is $100. Lava is more accessible for smaller borrowers.

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

Lygos has no formal margin-call threshold and liquidates automatically at 90% LTV. 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. For a common 50% starting LTV (rather than each lender's maximum), the modeled buffers are 40 points at Lygos and 35 points at Lava.

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

It depends on your priorities. Lygos (10% APR, non-custodial (DLC), min $25,000) is better for borrowers who prioritize non-custodial security and want a flat transparent rate. 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. Use the rate table and cost comparison above to model your specific scenario.

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Understand the key terms

Rehypothecation Discreet Log Contracts Custodial vs. Non-Custodial LTV Ratio Margin Call Counterparty Risk

See loan scenarios

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