Is Lava custodial?

Lava is not custodial.

That being said, we don’t want to obfuscate the trust assumptions being made when you use Lava. No system is fully trustless. You are using software written by Lava, on devices created by Apple or Google, and in any loan system, there is some group (in Lava’s case a multi-party system) that is the arbitrator for price-based loan events.

Lava is designed to be trust-minimized, rather than fully trustless. We create redundancy where possible, so that no single compromise or failure can lead to loss of funds. For example, price-based loan events are triggered by multiple price feeds being attested to by multiple entities.

We also enable you to verify your assets are safe via proof of reserves plus, where you can see your loan collateral (and other assets held on the platform) on-chain. The assets you store on Lava are your assets. We cannot trade, rehypothecate, or confiscate your funds. Lava is built with self-sovereignty as a value.

Lava has been audited by independent security experts and is backed by the world’s leading fintech investors (including Khosla Ventures, Founders Fund, and Susquehanna). Our team includes bitcoin developers who have served as core contributors for projects including Bitcoin Core, Lightning Network, and DLCs. Lava was built from day one to be the most secure platform for bitcoiners. Security is our top priority.

You can also contact our US based client service team 24/7 with any questions. Our goal is to build the most reliable financial institution for bitcoiners, and we are here for you.

For more information about how your funds are secured on Lava, see this FAQ.