May 12, 2025
Introducing HODL Pay: Unlock Spending Power Without Selling Your Crypto
The Important Bits
BitPay introduces the next big leap in crypto payments: HODL Pay. More than just a bridge between real-world payments and DeFi, it's the hyperloop to unlocking spending power without selling your crypto. Keep your crypto, spend freely, and own your future.
What is HODL Pay?
HODL Pay brings one of the most popular features of DeFi into BitPay’s world of merchants and crypto spending tools. It unlocks spending power without having to sell your crypto assets to make the purchase. Through BitPay's integration with Aave, you can borrow against your crypto holdings and pay for travel, shop, buy a new car, or even make your monthly credit card payments. Best of all, you get access to liquidity, all while holding on to your crypto. And it all runs on the world’s largest liquidity protocol, Aave.
What is Aave?
Aave is a decentralized finance (DeFi) protocol that allows you to borrow against your crypto holdings. With Aave, you can tap into your portfolio’s value without selling your assets. This means you can hold on to your crypto while meeting your immediate payment needs. For more details on Aave, we recommend reading this Aave 101 primer.
How does HODL Pay work?
HODL Pay allows you to connect to Aave to borrow against existing supplied collateral and spend borrowed assets in one transaction. This streamlined payment integration means no more jumping between wallets, dancing from exchange to DeFi platform, or liquidating your positions to make a purchase.
We connect you to Aave's open-source, on-chain smart contracts to provide liquidity by enabling borrowing against over-collateralized supply positions. You can borrow a variety of stablecoins from Aave, ensuring you receive the exact amount needed to pay your BitPay invoice.
Repay the borrow at your convenience directly with Aave from the Aave dashboard.
Aave supply requirements
To unlock this integration, you must have an existing Aave supply associated with your wallet. This supply acts as a collateral, enabling you to borrow assets when needed. Learn more about supplying liquidity on Aave.
Accessing Aave liquidity for payments
Once your wallet is properly set up with an Aave supply, you can borrow to cover the cost of your BitPay invoice. The borrowing process is designed to be fast and efficient, ensuring you have assets exactly when you need them. These borrows from Aave are created directly from the BitPay invoice interface. HODL Pay is available on the Ethereum, Polygon, Arbitrum, Base, and Optimism networks.
Collateral requirements and Loan-to-Value (LTV) ratio
To borrow and pay with HODL Pay, users must supply collateral on Aave exceeding the loan amount to protect against volatility. Each asset has a set Loan-to-Value (LTV) ratio, determining how much can be borrowed (e.g., 75% LTV on ETH allows borrowing up to 75% of its value). If LTV exceeds the threshold, liquidation risk increases. Borrowed assets accrue interest, and collateral stays locked until repayment. We recommend users familiarize themselves with Aave’s collateral requirements before using HODL Pay. The performance of most cryptoassets can be highly volatile, with their value dropping as quickly as it can rise. It is up to you to monitor your loan for potential liquidation risk.
Wallet requirements
To use HODL Pay to pay a BitPay Invoice, your wallet must support WalletConnect. It must have sufficient collateral supplied at Aave. Your wallet must also support receiving, storing, and sending ERC-20 stablecoins on the Ethereum network and various Layer-2 networks.
Invoice payment
With the assets borrowed from Aave, you can promptly pay your BitPay invoice. This integration is particularly useful during periods of market volatility, allowing you to maintain liquidity without the need to liquidate your long-term holdings.
How to get started with HODL Pay
Already using Aave? Start spending now
If you already have an Aave supply position, you’re good to go! Simply generate a BitPay invoice by choosing BitPay at checkout with a BitPay merchant, enrolling in Bill Pay, or buying a crypto-powered gift card. Then, follow the invoice payment instructions below.
New to Aave? Set up your supply position first
No Aave supply position? No problem. Read Aave’s documentation on everything you need to know about supplying assets. Once your supply is set up, generate a BitPay invoice by selecting BitPay at checkout with a BitPay merchant, signing up for Bill Pay, or purchasing a crypto-powered gift card. Finally, follow the invoice payment steps below.
How to pay a BitPay invoice with HODL Pay
Step 1: Generate a BitPay invoice
Generate the invoice by checking out with a BitPay merchant. For Bill Payments and gift card purchases, generate the invoice from the BitPay Wallet app.
Step 2: Connect your wallet
From the invoice interface, connect your wallet using WalletConnect 2.0. The wallet must have an existing Aave supply position to use HODL Pay. Then select the “HODL Pay” option on the next screen.
Step 3: Choose borrowing position and review loan details
Choose the available borrowing positions. Available loan borrowing balance is reflected based on your supplied collateral. Next, select the specific loan you wish to use for your payment.
Important: Pay close attention to your wallet’s Aave Health Factor. The health factor is a critical metric within the Aave Protocol determined by Aave that measures the safety of a borrow position. If the health factor gets too low, your collateral will be liquidated. The performance of most cryptoassets can be highly volatile, with their value dropping as quickly as it can rise. It is up to you to monitor your loan for potential liquidation risk.
Step 4: Review and confirm the transaction
Closely review the details of your transaction including your loan amount, APY, Health Factor, and total amount due. Once you’ve reviewed the transaction details, click “Borrow & Pay”. Approve the transaction from your wallet. Once the payment has been confirmed, a confirmation message will appear in the BitPay invoice interface. From here, you can again review transaction details and view the transaction on the blockchain using a block explorer.
Tip: Add debt tokens to your wallet to track your loan
Step 5: Monitor loan health and repay your loan
After borrowing and paying with HODL Pay, it is imperative to monitor your loan Health Factor. Maintaining a health factor above 1 is crucial to avoid liquidation, as it fluctuates with market changes in collateral and borrowed asset values. While there is no universally "safe" health factor, it depends on asset volatility and correlation, with lower health factors being more acceptable for stable or closely correlated assets like stablecoins. The performance of most cryptoassets can be highly volatile, with their value dropping as quickly as it can rise. It is up to you to monitor your loan for potential liquidation risk. Learn more about Health Factors and liquidations.
Repaying your loan and freeing up collateral can be done from the Aave dashboard. Payments can be made incrementally or in-full. After the repayment is confirmed, your borrowed amount will decrease, and your health factor will improve. Fully repaying your borrow position will release your collateral, making it available for withdrawal or other uses. Learn more about repaying token loans. Note that BitPay does not maintain your loan and cannot accept repayments. You are solely responsible for tracking your loan through the Aave dashboard. BitPay is not responsible for anything that might impact the Aave protocol, including cyber-security events or hacks of the Aave protocol. Additionally, BitPay has no responsibility with respect to your loan, including without limitation errors, loss of collateral, ability to access your collateral, or liquidations.
HODL Pay Frequently Asked Questions (FAQs)
What is HODL Pay?
HODL Pay is a payment solution that lets you borrow from Aave against your crypto holdings to complete purchases with BitPay merchants—without selling your assets.
How does HODL Pay work?
HODL Pay follows a simple Supply → Borrow & Spend flow.
Supply crypto as collateral in Aave.
Borrow stablecoins from Aave against your supplied assets. Spend borrowed funds instantly to pay any BitPay invoice.
Does BitPay provide or manage my loan?
No. HODL Pay provides the ability for a user to connect with Aave, which is a decentralized finance protocol, to borrow stablecoins to spend through BitPay. BitPay does not lend stablecoins or hold collateral. Loan management, collateral liquidation and repayment of borrowed assets is solely done by or through the Aave protocol. BitPay is not responsible for anything that might impact the Aave protocol, including cyber-security events or hacks of the Aave protocol. Additionally, BitPay has no responsibility with respect to your loan, including without limitation errors, loss of collateral, ability to access your collateral, or liquidations.
What do I need to use HODL Pay?
A crypto wallet with WalletConnect 2.0 support.
An active supply position on Aave with available borrowing power.
A purchase or invoice from a BitPay merchant.
Can I use HODL Pay for any BitPay transaction?
Yes! You can use HODL Pay to complete any BitPay invoice, including payments to merchants, gift cards, and Bill Pay payments.
How do I pay an invoice using HODL Pay?
Generate a BitPay invoice at checkout.
Connect your wallet with an Aave supply position.
Select “HODL Pay” as your payment option
Choose your preferred position and review borrowing details.
Review and confirm the transaction.
How is this different from selling my crypto to pay?
With HODL Pay, you retain ownership of your crypto while still accessing liquidity. Selling removes you from the market, while borrowing lets you keep your crypto.
What cryptocurrencies can I use as collateral?
HODL Pay supports any asset that can be supplied as collateral on Aave. Availability depends on the Aave market you're using. Learn more about supplying liquidity on Aave.
What stablecoins can I borrow?
You can borrow various stablecoins supported by Aave, such as USDC, DAI, USDT, and more, to complete your BitPay payment.
What is the Aave Health Factor, and why is it important?
The Health Factor measures the stability of your borrowing position. If it drops too low, your collateral may be liquidated. It’s important to monitor and maintain a safe Health Factor. The Health Factor is determined solely by Aave. BitPay does not determine the Health Factor. Learn more about Aaave Health Factors. The performance of most cryptoassets can be highly volatile, with their value dropping as quickly as it can rise. It is up to you to monitor your loan for potential liquidation risk.
How do I repay my borrowed assets?
Repay your borrowed position anytime directly through the Aave dashboard. You can pay back incrementally or in full to free up your collateral. You cannot repay your borrowed position through BitPay. Learn more about repaying borrowed tokens.
Is there a risk of liquidation?
Yes. If your Health Factor falls too low due to market fluctuations, your collateral may be liquidated. Keeping an eye on your borrowed position status is crucial. Liquidation thresholds are set solely by Aave Governance and not by BitPay. Learn more about Health Factors and liquidations. The performance of most cryptoassets can be highly volatile, with their value dropping as quickly as it can rise. It is up to you to monitor your loan for potential liquidation risk.
What are the fees?
In addition to BitPay processing fees and blockchain confirmation fees, borrowing from Aave incurs standard interest rates and transaction costs. Always review borrowing terms before borrowing.
Note: All material herein is for informational purposes only, and should not be interpreted as legal, tax, financial, investment or other advice. Nothing contained herein shall constitute an offer, or solicitation of an offer, recommendation, endorsement or offer to invest, buy, or sell any interests, shares, coins, tokens or other crypto assets or to participate in any investment or trading strategy. BitPay is not liable for any errors, omissions or inaccuracies. For legal, tax, investment or financial guidance, a professional should be consulted.
