Stacks sees Bitcoin DeFi growth as Granite Protocol lands on Borrow on Bitcoin

Granite Protocol, a Bitcoin liquidity platform built on the Stacks blockchain, is now listed on Borrow on Bitcoin, a rate comparison platform operated by Sypher Capital. The listing, which went live on July 29, puts Granite’s lending terms directly alongside centralized and decentralized competitors, and the numbers tell an interesting story.

Granite’s variable borrow rate sits at 1.66% APR. For context, centralized finance lending rates currently range from 7.25% to 18.9% APR, while EVM-based DeFi markets average between 3.57% and 8.02% APR.

How the protocol actually works

Granite lets users deposit sBTC, the Stacks network’s 1:1 Bitcoin-backed asset, as collateral to borrow USDCx. Users can bridge their BTC to sBTC through the official Stacks bridge, then put that sBTC to work as collateral.

Rather than pooling all user funds together, Granite uses isolated liquidity pools. Each market operates independently, so a problem in one pool doesn’t cascade into others.

There’s also no rehypothecation risk. Granite simply doesn’t lend out collateral that depositors have provided. The protocol also employs soft liquidation mechanics, a more forgiving approach to handling undercollateralized positions compared to hard liquidations. One important caveat: Granite Protocol is not available to users in the United States.

Stacks’ broader Bitcoin DeFi push

In Q1 2026, sBTC total value locked peaked at $545 million. Total deployed DeFi capital across the Stacks ecosystem reached $121 million during the same period.

Granite’s own TVL has declined from approximately $26 million to a current range between $7.5 million and $12 million.

Borrow on Bitcoin isn’t a lender. Sypher Capital built it as a comparison tool that aggregates rates across centralized and decentralized options, letting users evaluate their choices side by side. Granite’s inclusion gives the protocol visibility among users who are actively shopping for the best terms on Bitcoin-backed loans.

What this means for Bitcoin investors

A 1.66% borrow rate with no rehypothecation risk is a meaningfully different proposition than the 7% to 19% range available through centralized platforms, especially for institutions that experienced the fallout when centralized lenders collapsed in previous downturns.

The isolated pool structure addresses risks demonstrated when Celsius, BlockFi, and others went down, where one bad position contaminated an entire platform’s balance sheet. Granite’s architecture is designed specifically to prevent that chain reaction.

The US restriction means American investors are locked out entirely, which is a meaningful limitation on Granite’s potential growth ceiling.

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