ETH holders now have a new way to access liquidity without selling their positions, as Liquidium introduces ETH-backed borrowing at rates of around 1 per cent.
The update allows users to supply ETH as collateral and borrow supported assets while maintaining exposure to Ethereum. The move extends Liquidium’s lending model beyond Bitcoin and brings ETH into its native cross-chain framework.
Users supply ETH, review borrowing options, check loan-to-value ratios, interest rates and liquidation levels, then proceed with borrowing if the terms align with their strategy. Repayment is managed within the same system, with positions subject to market movements throughout the loan term.
Liquidium says the addition is aimed at giving users more flexibility in how they manage digital assets, particularly during periods where selling ETH may not be preferred. The protocol already supports BTC-backed lending, and ETH expands its range of collateral options across major crypto assets.
A key part of the infrastructure is Chain Fusion technology developed within the Internet Computer Protocol ecosystem. It enables canisters to interact directly with external blockchains, removing the need for wrapped tokens or traditional bridging models. This approach is intended to allow more direct coordination between chains in lending workflows.
For ETH borrowers, the mechanics are similar to other crypto-backed loans, but the risks remain unchanged. Positions can be affected by volatility in ETH price, shifts in borrowing rates and liquidation thresholds if collateral values fall. Users are also responsible for managing repayment obligations over time.
Liquidium notes that ETH borrowing can be used for a range of purposes, including accessing short-term liquidity, borrowing stablecoins while retaining ETH exposure, or reallocating capital into other decentralised finance opportunities. However, these use cases depend on individual strategy and risk tolerance rather than fixed outcomes.
Before opening a position, users are encouraged to review collateral ratios, repayment terms and potential liquidation scenarios. Smaller initial positions may help users understand how ETH-backed lending behaves under live market conditions.
Security remains a stated focus for the protocol. Liquidium references an independent review of its canisters conducted by Trail of Bits. While such audits assess implementation quality, they do not remove market or user-side risks, which continue to sit with borrowers.
The expansion reflects Liquidium’s broader direction towards supporting multiple native assets within a single lending environment, with ETH joining BTC as part of its cross-chain collateral base.
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