> For the complete documentation index, see [llms.txt](https://docs.loopingcollective.org/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.loopingcollective.org/products/loopedbtc/product-mechanics.md).

# Product Mechanics

<figure><img src="/files/gzKDIyfyFeD4huSxtgD1" alt="How LcBTC works"><figcaption><p>How LcBTC works</p></figcaption></figure>

### How the Strategy Works

1. Deposit BTC / wrappers (cbBTC, wBTC)
2. BTC serves as collateral on Aave / Morpho → Borrow stablecoins at max 50% LTV
3. Stablecoins deployed across lending markets on HyperEVM (\~12%+ APY)
4. Additional yield source from a Hyperliquid Basis Trade & HLP vault (\~17% avg. APY)
5. Automated cross-chain arbitrage engine captures 8–15% rate premiums across lending markets
6. All returns converted back → Paid in BTC

## Technical Implementation

### Withdrawal Mechanics

#### LcBTC → cbBTC / wBTC

**Overview**\
Withdrawals from the BTC vault are request-based and resolved manually by the Edge Capital team. Requests do not expire and can be accumulated.

**Key Mechanics**

* **Request submission:**
  * Submitting a new withdrawal **increases** the existing request amount.
  * You may have **up to two active requests at the same time**, one for **cbBTC** and one for **wBTC**.
* **Asset handling during withdrawal:**
  * Upon requesting a withdrawal, **LcBTC is transferred to the vault**.
  * Once the request is resolved, you receive **cbBTC or wBTC**.
* **Cancellation:**
  * You can manually cancel a withdrawal by calling `cancelRedeemRequestOfAsset`.
* **Timeouts:**
  * Withdrawals **do not time out**.
* **Settlement:**
  * Requests are **solved by the Edge team**.
* **Fees:**
  * **No withdrawal fees** apply.


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