# Phases

1. **Commit and Deploy** The Coordinator finalizes `H(x)`, `Y`, and `T`. It prepares the Taproot collateral script with repay, fallback, and default paths, and deploys the EVM escrow with mirrored commitments.
2. **Fund Principal on EVM** The Nexus Node funds the escrow with stablecoin principal. Lender keys remain under lender control.
3. **Lock Collateral on Bitcoin** The Borrower sends BTC to the Taproot script. Network confirmations start.
4. **Prove and Disburse** The Borrower submits an SPV proof of the BTC lock to the EVM escrow. After verification, the escrow disburses loan funds to the Borrower.
5. **Quiet Term** No on-chain liquidations occur. The Nexus Node maintains the protective BTC put hedge off chain for the duration of the loan.
6. **Repay on EVM** The Borrower repays principal plus interest to the escrow before or at `T`.
7. **Withdraw and UnlockMain path using hash lock:** The Nexus Node reveals `x` to withdraw on EVM. Once `x` is public, the Borrower uses it to spend the Taproot repay path and reclaim BTC. **Fallback path using adaptor secret:** If `x` is not available, the withdrawal process discloses or enables derivation of `y`. The Borrower completes the Taproot adaptor path with `y` and reclaims BTC. **Liveness assist if required:** If a party is unresponsive beyond the agreed window, the Cosigner assists with liveness according to preset rules. The Cosigner cannot move funds on its own.
8. **Default at Maturity** If repayment is not made by `T`, the lender spends the Taproot default branch after the timelock. The external hedge covers price risk by design.