# collateral

URL: https://blockspace.wiki/glossary/collateral/

In the planned blockspace.loans design, the [blockspace asset](https://blockspace.wiki/glossary/blockspace-asset/) a borrower locks in a Bitcoin contract that neither lender nor borrower can break alone, while the lender's bitcoin goes to the borrower. It has to live on a Bitcoin output (a [UTXO](https://blockspace.wiki/glossary/utxo/)), because the contract locks an output. Planned as of 2026-10-21: nothing is an offer of credit.

The first design would accept one [inscription](https://blockspace.wiki/glossary/inscription/) per loan, the whole [rune](https://blockspace.wiki/glossary/rune/) lot on one output, or a [Counterparty asset](https://blockspace.wiki/glossary/xcp-asset/) once it is an [attached asset](https://blockspace.wiki/glossary/attached-asset/). Balances that live only in an indexer's ledger, such as BRC-20, are not in the first design.

Sources:

- blockspace.loans: borrow bitcoin against your blockspace (planned) · https://blockspace.loans/
- blockspace.loans: what counts as collateral (planned) · https://blockspace.loans/collateral/

Updated: 2026-10-21