granite.world

What It Is

Granite Protocol is a Bitcoin Liquidity Protocol built on the Stacks blockchain. It positions itself as a DeFi lending protocol that lets users “borrow stablecoins against Bitcoin collateral.” Its core is not trade matching, but an on-chain credit market between borrowers and stablecoin liquidity providers: borrowers deposit BTC/sBTC as collateral and borrow stablecoins, while lenders deposit stablecoins into liquidity pools and earn yield from the interest paid by borrowers.

Core Mechanism and Security

Granite’s biggest selling point is “No Rehypothecation”: users’ BTC collateral is not lent out again or used to generate yield, avoiding the pooled-collateral risks common in many DeFi/CeFi lending models. The trade-off is that the collateral itself does not earn yield. The protocol uses sBTC to connect Bitcoin to DeFi. sBTC is a 1:1 Bitcoin-backed asset developed by the Stacks community, managed by Stacks validators through threshold-signature scripts on the Bitcoin chain and combined with Stacks’ PoX consensus mechanism. The source material also mentions security audits, Halipot and ABA white-hat code reviews, and a public Github, all of which help with transparency.

Lending, Liquidation, and Fees

Granite’s loans are closer to an open-ended credit line: as long as the account maintains a healthy LTV, there is no fixed repayment deadline or repayment schedule. If the LTV deteriorates, the system triggers liquidation. Its “soft liquidation” only liquidates enough collateral to restore solvency, rather than liquidating a large portion of collateral in one go, which is more borrower-friendly. In terms of fees, the source material does not disclose specific borrowing rates, lender yields, protocol fees, or liquidation penalties. It only states that liquidators can receive a small collateral reward, so the actual cost of using the protocol still needs to be confirmed in the app or documentation.

Pros, Cons, and Who It’s For

The advantages are a clear Bitcoin-collateral lending model, no rehypothecation of collateral, a relatively gentle liquidation mechanism, and a decentralized-custody narrative built around Stacks/sBTC. The downsides are its reliance on the sBTC bridge, Stacks validators, and smart-contract infrastructure, which means on-chain technical risks remain. Key commercial parameters are also insufficiently disclosed, and the source material does not clarify KYC requirements, fiat on/off-ramp support, licensing information, or the specific stablecoins supported. It is better suited to users who already understand DeFi risks and want stablecoin liquidity without selling BTC, as well as stablecoin holders willing to take smart-contract risk to earn interest.

Access from China and Alternatives

The source material does not provide information on access from mainland China, network availability, or payment support, so china_access can only be rated as unknown. The protocol itself focuses on on-chain lending and does not disclose any fiat deposit capability. Chinese users researching similar options may compare Aave, Compound, MakerDAO/Sky, Sovryn, or other BTC DeFi protocols in the Stacks ecosystem, with particular attention to frontend access restrictions, wallet compatibility, stablecoin sources, and local compliance risks.