Atomic Loans is a protocol for the creation of cross-chain and peer-to-peer debt agreements that are open, borderless, censorship-resistant, and neutral in nature. Through the use of atomic swap technology, we are committed to building a future for decentralized finance that is not limited to any one blockchain or network. We are fresh out of the ConsenSys Labs Accelerator.


Bitcoin. What does that word mean to you? For the technologist, Bitcoin brought about the first open, borderless, censorship-resistant, and neutral network on which money and value could be exchanged in a decentralized way. For the average investor, it’s an asset to buy, hold, and sell… as well as pray that you did each of the above at the right price.

For us at Atomic Loans, Bitcoin represents unrealized potential, a form of sound money that as of today, can’t yet be used for everything money should be used for. Bitcoin should be something you can pay your rent and bills with, as well as engage in financial services with, be it exchanging for other currencies or taking out loans. Activities that we typically do with fiat currencies, we should be able to do with Bitcoin.

Where Bitcoin differs from fiat is that it gives us a chance to engage in those financial services the right way — without the intermediation, centralization, and censorship of the fiat world. And today at Atomic Loans, we’re proud to announce how we’re doing our part to realize that vision, beginning with decentralized bitcoin-backed loans.

Introducing Atomic Loans:

Atomic Loans introduces the first protocol for the creation of cross-chain debt agreements that are open, borderless, censorship-resistant, and neutral in nature. Using atomic swap technology, we use the functionality of native blockchains, namely Bitcoin and Ethereum in our first iteration, to enable peer-to-peer lending without requiring customers to delegate trust to centralized custodians.

Where atomic swaps enabled the permissionless and trustless exchange of cryptoassets across blockchains without the need for a centralized exchange, Atomic Loans allows anyone to engage in the borrowing and lending of cryptoassets across blockchains in a similar permissionless and trustless manner.

For early access to our closed alpha launch, sign up on!

While building Atomic Loans, we optimized for the following goals and principles:

  1. Atomic swaps for interoperability

A truly open and borderless financial system should not just transcend the boundaries of geography, wealth, and status, but also the boundaries between different blockchains and assets.

2. Self-custody for decentralization

At its core, Bitcoin is a decentralized currency in which no intermediary is needed to transact or custody funds on behalf of someone else. Similarly, atomic loan agreements don’t require third parties to custody funds at any point. All collateral and loaned funds are locked within user-deployed smart contracts and Bitcoin scripts.

Decentralization done right is crucial, as it eliminates the risk of having borrower and lender funds seized or inaccessible through hacks, downtime, or government intervention.

3. Unstoppable code for censorship-resistance

At ETHDenver, Andreas Antonopoulos discussed the issue around “oops clauses” – governance mechanisms or admin privileges in smart contracts used by many blockchain projects. The point is, in the event something goes awry with the smart contracts, the tools exist in the hands of the project creators to pause the contract or reverse the effects.

But as Andreas puts it, when smart contracts include backdoors, your "ability [to stop it] becomes responsibility." If the smart contract or project ever comes under scrutiny from government and regulatory bodies, this safety measure then doubles as a point of failure.  At Atomic Loans, we believe in the importance of unstoppable code and censorship-resistance, hence why our contracts include no "oops clauses".

4. The option for customizable loan terms for neutrality and flexibility

The Bitcoin protocol gives every user the power to transact and innovate without permission by being neutral to the sender, the recipient, and the transaction contents itself. Atomic Loans functions similarly by allowing borrowers and lenders on the protocol to freely propose and reciprocate to any debt agreement with loan terms they’re comfortable with. As opposed to having one central party determine rates and terms, Atomic Loans is a neutral protocol where prevailing loan terms and rates will be driven by the forces of supply and demand.

BIP 197 and ERC 1850

The Atomic Loans protocol is built using Chain Abstraction Layer, an open-source Javascript library initially created by Liquality to enable easy cross-chain application development between Ethereum and Bitcoin. We discuss further details about the technical specifications of our protocol in our paper, as well as in BIP 197 and ERC 1850, where we outline the specific Bitcoin and Ethereum implementations of our protocol. We also look forward to chatting about your thoughts and feedback on our protocol in our Telegram channel!

Decentralized bitcoin-backed loans... who needs them?

Atomic Loans is an open-source protocol open for any borrower or lender to use. Initially, ​​we’ll combine sound money in the form of Bitcoin with the programmability of the Ethereum blockchain. We allow bitcoin holders to get access to stablecoin and fiat liquidity through a loan in order to pay off personal and business expenses, without the need to liquidate their sound money. Meanwhile, it also allows individuals and organizations to put their fiat or stablecoin to work by providing liquidity as a lender to those who need it.

That being said, through our customer interviews, we’ve identified specific early adopter segments we will focus on first:

Borrowers:  Working capital for expenses. It’s a problem almost all businesses face. In the business of cryptocurrency mining, it’s a problem made more severe during a sideways / bear market. Today, many miners are resorting to liquidating their pre-existing mining rewards they’ve saved up to pay for recurring operational expenses like electricity, rent and staffing. Those looking to expand their operation are doing the same in order to finance rig purchases and hosting services.

Atomic Loans presents a cost-efficient and trustless way for cryptocurrency miners to access working capital for operational and capital expenses. Without having to liquidate mining rewards, miners are able to maintain price exposure to Bitcoin and defer capital gains tax.

Lenders: In the fiat monetary regimes we're forced to live in, beating inflation and putting your money to work is king. Currently, countless businesses and individuals have money locked up in bank accounts losing value making little to no returns. In the crypto space, many businesses and investors hold stablecoin reserves sitting idle in wallets.

Atomic Loans offers a convenient and trustless way for crypto-holding organizations and individuals to lend stablecoins and make passive income, while retaining the choice and flexibility to dictate how they lend.

How far have we gotten?

Over the past several months, we’ve been hard at work conducting customer interviews, getting feedback, as well as developing the protocol itself. Today, we’re excited to share news about the launch of our closed testnet alpha, to take place early next week! Codenamed Agassiz (pronounced AG-ah-see), the alpha will allow you to collateralize your testnet bitcoin and get access to a stablecoin on the Ethereum Kovan testnet. It’s the first milestone of many, we’re certain plenty of challenges lie ahead, but we’re excited to keep you updated on our progress along the way!

For the moment, Agassiz will be a closed alpha launch, available to the first 100 that sign up. If you would like to be considered for early access, sign up on!

We recognize that decentralized finance is nothing new. From DEX’s to decentralized lending, numerous DeFi protocols and applications have emerged on Ethereum with the goal of creating a decentralized financial system that vastly improves upon its legacy counterpart.

Source: Bloqboard

What’s absent is a protocol that allows for the leveraging of digital sound money — Bitcoin, an asset that, at the time of writing, makes up over 52% for the cryptocurrency market cap. At Atomic Loans, we realize this is a problem that can’t be fixed with makeshift centralized solutions, but rather a native and decentralized one.

Bitcoin gave us a chance to shake things up. It gave us the fuel for a technological revolution. It gave us the basis for a decentralized financial system that is more open, transparent, and secure than the centralized systems of today. Let’s ensure it fulfills that promise by building the proper financial tools on top of Bitcoin that share this ethos.

Come help us build the future!

We seek to build a financial system that is free from the influence of intermediaries and central authorities, that is fundamentally open for every one and every asset. Bitcoin-backed atomic loans are just the beginning, and we can’t wait to get started.

For those of you interested in keeping up with the latest news about product development and releases from Atomic Loans, join the discussion on our Telegram channel!

More importantly, for early access to our closed alpha launch, sign up on!

Tony Cai and Matthew Black are the Co-Founders of Atomic Loans – a ConsenSys-backed startup working on building a cross-chain future for decentralized finance, beginning with Bitcoin-backed loans. Tony serves as the Product Lead and Matthew serves as the Technical Lead on the team.

Tony is a former developer at Manulife Financial and OpenLaw, a ConsenSys spoke working on the creation and execution of legal agreements on blockchain. Matthew is a former developer at Shopify and Liquality, a ConsenSys spoke working on cross-chain Bitcoin-Ethereum atomic swaps. Both studied Computer Science at the University of Waterloo.