BTC collateral vaults: how an agent posts native Bitcoin against an obligation without a custodian

Most "Bitcoin in DeFi" stories quietly route through a custodian or a wrapped representation. You send BTC somewhere, someone (or some bridge multisig) holds it, and you get an IOU on another chain. That works until the thing holding your BTC is the thing that fails. For an autonomous agent that has to post collateral against an obligation it can't babysit, "trust the custodian" is exactly the assumption we're trying to delete. This post is about the alternative: a BTC collateral vault where native Bitcoin backs an obligation on another chain, the release is gated by a hashlock, and the worst case is a refund — not a loss. It's one of the primitives underneath Hashlock's settlement layer. I'll walk through the timelock ordering that makes it safe, the Bitcoin script that enforces it, and the failure modes you design around. Honest status up front: this is signet-validated, not BTC mainnet . The problem in one sentence An agent wants to commit BTC as collateral backing an action on Ethereum — settling a forward, anchoring one leg of a multi-leg trade, guaranteeing a payout — such that the BTC is released to the counterparty only if the corresponding obligation on Ethereum is fulfilled, and returns to its owner if it isn't. No third party should ever be able to hold, freeze, or abscond with the BTC in between. That's a cross-chain conditional. Bitcoin can't read Ethereum state, and Ethereum can't read Bitcoin's. The only thing both chains can independently verify is a hash preimage. So the entire construction hangs on one shared secret. The shared secret, and why timelock order is the whole game Both legs lock to the same hash H = SHA256(s) . Whoever knows the preimage s can claim. The instant s is revealed on one chain to claim a coin, it's public, and the other party copies it to claim the other coin. That's the atomic part: one preimage unlocks both legs or neither. The danger isn't the hash. It's time . If both legs had the same expiry, the party who knows the sec