Fountnhead Introduction

Fountnhead is a trustless and secure platform where both lenders and borrowers get cryptographic guarantees of loan terms (principal, repayment amount, duration) that are enforced by the Bitcoin L1 blockchain itself.

Our platform allows both lender and borrower to verify all loan terms before committing to a loan. If any of the terms are not what the users agreed to then the loan won’t originate — the lender will not send BTC and the borrower will not lock their ordinal. Cooperation of parties (lender, borrower, the platform) is only required before the loan origination transaction is confirmed, after this point cooperation is not required to enforce loan terms.

Even if Fountnhead ceases to exist after a loan was originated, both the lender and the borrower still can repay or liquidate the ordinal. Importantly, Fountnhead cannot modify the terms of the loan without the consent of both the lender and the borrower (via wallet signature).

Why Fountnhead?

Fountnhead enables trustless lending and borrowing on Bitcoin using Ordinals as collateral:

• Non-Custodial Architecture: No third party holds user funds or assets, no oracles are involved.
• Cryptographic Guarantees: All loan terms are enforced by the Bitcoin L1 network with only lender and borrower signatures.
• Trustless Execution: Both lenders and borrowers can verify all loan terms before committing, and once a loan is originated, no cooperation between parties or the platform is required to enforce the agreed terms.

In the following sections, we’ll explore the detailed technical design that makes this possible.