# Deposit BTC

The user adds more Bitcoin to their existing vault as additional collateral, keeping their borrowed UNIT amount unchanged but improving their collateralisation ratio, which makes liquidation less likely. This is executed through a single transaction that updates the relevant vault record to reflect the increased Bitcoin collateral and its effect on the liquidation price.

The user initiates a transaction to add more BTC collateral to their existing vault UTXO. The MPC network verifies the incoming BTC amount and confirms the transaction. The transaction builder then constructs a PSBT that combines the new BTC with the existing vault collateral. The outputs include an updated vault UTXO with the increased collateral amount, while maintaining the same borrowed UNIT position.

In a second transaction, the updated vault state is processed, covering the network fees for both transactions to ensure atomic execution. This generates an updated vault token reflecting the new total collateral and improved collateralisation ratio. The vault UTXO continues to support both the user update path and the guardian/oracle liquidation path, with the increased collateral providing a greater safety buffer.

An OP\_RETURN output records the new vault state, including the updated BTC collateral and revised collateralisation ratio.

<figure><picture><source srcset="/files/1kKZRU8Yal5r2FEhlicg" media="(prefers-color-scheme: dark)"><img src="/files/M8X3tFg3l6ayqjfMw1XY" alt=""></picture><figcaption><p>Deposit BTC Transaction Diagram</p></figcaption></figure>


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