Blockchain & Crypto

BTC Gets Its Own Benchmark Interest Rate Index

Benchmark LINER (Lightning Network Rate) is an innovative index designed to measure bitcoin (BTC) returns on the Lightning Network and showcase its potential for low-risk enterprise yield

BTC Gets Its Own Benchmark Interest Rate Index

Amboss, a data analytics provider for the Bitcoin Lightning Network (LN), has introduced LINER (Lightning Network Rate), to serve as a benchmark interest rate for bitcoin without credit risk, similar to the traditional finance’s LIBOR (London Interbank Offered Rate).

According to the press release, LINER aims to provide an alternative to enterprises that seek exposure to bitcoin, allowing them to avoid the credit risk associated with CeFi yield platforms.

The reference rate is the first of its kind in the crypto industry, “contributing to the establishment of unmanipulated money markets independent of a central authority.” Not only is the index expected to help assess the true cost of capital, but also boost the Lightning Network‘s growth as a self-sustaining financial ecosystem.

LINER is composed of two insightful metrics: LINER Cost and LINER Yield, which provide enterprises with valuable insights into the lightning market. The companies investing in crypto could transparently compare LINER Cost and traditional payment card fees, to make informed decisions regarding their bitcoin holdings.

One of the possible use cases for the new index is for portfolio managers, investors and businesses to leverage the index in their decision-making processes.

This way, Amboss aims to encourage enterprise adoption of the Lightning Network. The BTC interest rate index shall demonstrate the cost savings and low-risk yield potential offered by Lightning-enabled payment infrastructure. Besides, LINER provides an incentive for large bitcoin holders to utilize self-custodial strategies for higher returns with minimal risks.

Nina Bobro

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Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.