Introducing Nectra: A Bitcoin-Backed Stablecoin Protocol for Bitcoin Loans

In 2025, Bitcoin and stablecoins have taken center stage. Bitcoin’s strong price performance and increasing mindshare have shown why it has earned its title as digital gold. However, Bitcoin’s function as a store of value is only scratching the surface of its potential. 

The next chapter in Bitcoin’s journey towards becoming hard money demands financial applications that share in Bitcoin’s underlying principles and treat Bitcoin as a first-class asset, otherwise known as Bitcoin Apps (BApps). 

Nectra takes Bitcoin one step closer as a novel lending protocol that enables Bitcoiners to take out loans of Bitcoin-backed stablecoins collateralized with only Bitcoin.

There are no middlemen, no custodians, no rehypothecation or pledging, no opacity, and no exorbitant fees. 

Simply permissionless, immutable code. 

The Problem with Bitcoin Loans: Custodians, High Fees, Rehypothecation and Opacity

Every Bitcoiner has faced the same predicament – Bitcoin is at all-time highs, yet your favorite asset sits in a long-forgotten cold wallet, entirely unproductive. You’re faced with a decision:

1. Sell your Bitcoin and lose exposure to Bitcoin’s price movements.
2. Leave it as a non-productive asset and watch as opportunities pass you by.

Smart traders traditionally solve this by loaning against their Bitcoin. Bitcoin loans give access to liquidity without selling any Bitcoin, transforming Bitcoin into an active asset.

However, the problem with existing Bitcoin lending platforms is that they burden you with custodial risk, opaque fees, and fine-print that puts their interests ahead of yours:

1. Custodial lock-in: You must transfer BTC to a centralized wallet, surrendering your self-sovereignty and control of your Bitcoin.
2. Hidden costs: Origination fees, rollover charges, and variable APRs quietly inflate the true borrowing cost.
3. Rehypothecation risk: Lenders can re-lend or leverage your collateral behind the scenes, exposing you to counter-party failure.
4. Rigid terms: Fixed-rate, fixed-duration loans force premature liquidations when markets move against you.
5. Slow exits: Off-chain paperwork and manual approvals delay repayments and collateral release.
6. Limited transparency: Closed-source systems hide liquidation logic and reserve ratios, leaving borrowers in the dark.

Enter Nectra: Permissionless, Transparent and Non-Custodial Bitcoin Loans

Nectra introduces a new solution. Bitcoin loans that are permissionless, transparent, secure, and immediate. Supported by Citrea, Bitcoin’s first ZK rollup, Nectra offers a trust-minimized way of transforming your Bitcoin into an asset that works for you. 

Creating a loan is simple:

1. Bridge Bitcoin to Citrea and deposit it into Nectra. Choose your preferred annual interest rate and instantly receive nUSD up to 83.3% Loan-to-Value (LTV).
2. If Bitcoin’s price drops, you can freely pay off debt or add more collateral to avoid the risk of being liquidated. 
3. Use your nUSD to swap, spend, leverage, bridge, or deposit into the native Savings Account to earn yield. 
4. Keep your loan open for as long as you want, or close it at any stage by repaying the amount of nUSD borrowed plus accrued fees. 

How Nectra Stays True to Bitcoin

Until now, Bitcoin lacked a Layer 2 network or derivative form that upholds its security properties. With the upcoming release of Citrea, it is finally possible to build robust financial systems on Bitcoin. Nectra will be one of the first applications to launch on Citrea as part of the Citrea Origins accelerator program. 

Nectra’s core lending and stablecoin protocol is immutable and entirely permissionless, meaning the system’s functionality is fixed right from the start. 

Collateral is transparently visible on chain and stays within the protocol, meaning your Bitcoin remains yours.

Liquidations ensure that nUSD remains overcollateralized to maintain the protocol’s health.

Meet Nectra’s nUSD: The Bitcoin-Aligned Stablecoin

nUSD is a soft-pegged USD stablecoin collateralized only with Bitcoin. This single-asset design sidesteps the custodian risk of fiat-backed coins, the complexity of multi-asset CDPs, and the reflexive spirals of under-collateralized algorithmic stablecoins. If you ever doubt the peg, you can swap 1 nUSD for $1 of cBTC minus fees on demand—no intermediary required.

Real Yield, Real Growth

Plug your nUSD into Nectra’s Savings Account to receive an xnUSD balance, and watch the protocol work for you. System fees accrue whenever someone pays interest on a loan, redeems nUSD for BTC, triggers a liquidation, or uses the flash mint or borrow functionality. The majority of these fees flow back to Savings Account depositors—no opaque lending desks, no magic yield farms, just on-chain cash flow. 

The Savings Account is entirely segregated from the loan and stablecoin system. It is mutable, allowing the creation of new yield generation strategies to stay competitive over time. 

More details on these exciting new yield strategies will be released soon. 

What’s Coming and How to Get Involved

The Nectra Bapp has just launched on Citrea testnet, so be sure to get in early with the Getting Started Guide. Open a loan, stress test the protocol, and park your freshly minted nUSD in the Savings Account and watch it grow. 

For more information be sure to read the docs.

Nectra will be one of the first applications to launch on Citrea Mainnet once it goes live. Yield opportunities, a cross-chain expansion, and fiat offramp integrations will follow the initial launch.

More details on the testnet deployment and the incentive program will be released soon. So be sure to follow Nectra on X, turn on notifications, join the Discord, and stay tuned!

Ready to un-idle your Bitcoin? Visit app.nectra.xyz and turn your Bitcoin into an income-generating asset—without compromising on the orange-coin ethos.