Our take
The global cryptocurrency sector has experienced phenomenal development and expansion over the last year. For all cryptocurrencies combined, the year 2020 began with a market capitalization of roughly 193 billion US dollars. By the end of January 2021, the market has surpassed the 1 trillion dollar milestone in terms of worldwide market value. This phenomenal increase indicates a trend in which more and more investors are eager to jump on the crypto bandwagon.
With the growing popularity of crypto-assets, the question of how to put them to good use arises. Investors and crypto aficionados who have purchased these digital assets may wish to earn interest on their holdings, obtain credit against them, or purchase additional crypto assets to diversify their portfolio. Ledn is a platform that assists people in achieving all of these goals. We'll go through Ledn in detail in the following sections to see how it brings value to the realm of digital coins.
Ledn.io: A Brief Introduction
Ledn.io was founded on August 3, 2018 by Adam Reeds and Mauricio Di Bartolomeo with the goal of creating financial solutions that would enable individuals save on digital assets. Ledn's portfolio now consists of three key products. Bitcoin-backed loans are the first. The second is a Bitcoin balance doubling service, and the third is a Bitcoin and USDC savings accounts. Later segments will go through each of these three services.
Ledn, based in Toronto, Ontario, develops financial solutions that meet world-class standards and give industry-leading rates to clients all over the world using Bitcoin and digital assets. Its Bitcoin-backed loans are designed to help investors who wish to ‘hodl' their assets have access to liquidity. With monthly compound interest payments, the savings accounts assist earn interest in Bitcoin and USDC. Ledn has partnered with Genesis Capital to offer these high-interest savings accounts. The rate of interest on these savings accounts may reach as high as 12.25% APY (annual percentage yield), where account holders receive their interest earnings every month. Apart from Genesis Capital, Ledn also collaborates with BitGo, probably the most well-known digital asset trust company and security company.
Ledn is a commercial concern that is incorporated under Canadian federal laws. Ledn is not an initial coin offering. It complies with the most stringent consumer protection and privacy regulations. Ledn offers one of the most qualified purpose-built digital asset storage together with one of the most complete insurance policies in the business thanks to its partnership with BitGo.
USD Margin Lending- Return rates optimized daily
- Secure, stable investment growth
- No minimum
- No lock-up period, withdraw anytime
Bitcoin-backed Loans by Ledn
The most enticing aspect of Ledn’s Bitcoin-backed loans is that it is a fast and convenient way to access credit without having to sell your Bitcoin holdings. Multiple benefits add to the lucrativeness of this loan.
First of all, since you do not have to sell your Bitcoins, you get to keep all the upside of your Bitcoin position. As there is no sale involved, you do not create a transactional event that is taxable. Overall, the ownership of your bitcoins remains with you, and it is sent back once you repay your loan.
There is no reason to worry about you having to keep your Bitcoins in Ledn’s custody. Ledn leverages the services of BigGo, which is the industry-leading custodian of Bitcoin. The custodial services of BitGo are insured by the most comprehensive insurance policy available in the industry.
The approval process of the Ledn Bitcoin-backed loans is super-fast. You will receive the funds within 24 hours of approval. The repayment schedule does not involve penalties for delay. Neither does it mandate payment through monthly instalments. In short, you can pay off your loans at any time without penalties.
The Procedure to Apply for the Bitcoin-Backed Loans
The application process for a Ledn Bitcoin-backed loan is not complicated. However, it does require you to share your personal information with the platform. The four documents that you need to provide are as follows:
- A copy of your government-issued identification document
- A copy of your proof-of-address document
- An image of you holding your government-issued ID
- Your bank account details for funding.
On proper submission of all these documents, the approval of the loan takes less than two minutes.
Bitcoin Loans and Volatility in Bitcoin Prices
If the price of Bitcoin falls dramatically, the platform will request that the borrower add more collateral to the loan wallet or pay down some of the principal. If the borrower does not take action after being asked, the platform will be forced to sell some of the Bitcoin in order to meet the loan-to-value ratio requirements.
If the price of the Bitcoin increases, the gain in the value is for you to keep. The only amount that you owe to the platform is the balance amount of the loan.
Savings Accounts
Ledn has partnered with Genesis as the primary borrower for its BTC and USDC Bitcoin and USDC savings accounts. It is the largest and most well-known lender in the digital asset industry.
There are various benefits to owning a Ledn Bitcoin or USDC savings account.
One of the most interesting aspects of these savings accounts is that they do not require any minimum balance and has no locked-in term requirements. Interest payments are paid monthly. You can withdraw your funds whenever you wish to.
Because the savings are in Bitcoin and USDC - both digital coins, your savings are protected from the traditional money-market inflationary woes.
The interest that accrues on these types of savings accounts is compound interest. It implies that your savings will grow exponentially. Interest accrues daily, and the payout happens in a compounded monthly format in all Ledn savings accounts.
Ledn Savings Account Interest Rates and Fees
A Bitcoin savings account's annual percentage return, or APY, may reach 6.10%. The APY on USDC savings accounts can reach 12.25%.
It is completely free to send Bitcoin or USDC to any other Ledn account. You will be charged a fee of 10 USDC for every withdrawal if you use the USDC savings account. Except for this, there is no additional charge. The 10 USDC fees cover the transaction fee on the Ethereum blockchain, as well as the miner's fee. Ledn does not charge any fees for using the Bitcoin savings account; nevertheless, when making withdrawals, the fees for processing the transaction on the Bitcoin blockchain are automatically taken from the withdrawal amount.
Ledn Savings: Earning Mechanism of the Platform
As previously stated, Ledn has partnered with Genesis Capital as its principal lender. By lending the Bitcoin and USDC to Genesis, Ledn gets interest. Ledn also makes money from bitcoin-based loans, which are secured by Bitcoin stored in Ledn's custody in a 2:1 ratio.
Account Protection
Ledn follows a strict policy when it comes to the safeguarding of funds held in a savings account. In order to reduce operational risk, the platform engages with best-in-class industry partners. However, the USDC kept in the savings accounts is not protected by the Canada Deposit Insurance Corporation or any other deposit-protection insurance policy.
B2X: Instant Bitcoin Holdings Doubling Service through a Ledn Loan
B2X is a one-of-a-kind service established by Ledn to help its consumers get the most out of their Bitcoin. You can get a dollar loan and then buy bitcoin equivalent to the value of your initial holdings using this service. As a result, you now have twice as much Bitcoin as you did before, as well as a bitcoin-backed loan.
It serves as a profit potential for those who believe Bitcoin's value will rise over time. B2X allows you to double your exposure, giving you the opportunity to double your profits.
The Risk-Quotient of B2X
Whether or not the B2X method is beneficial for you is solely dependent on the direction in which the price of Bitcoin moves. It is advantageous for you if the price of Bitcoin rises because it doubles your Bitcoin exposure. On the other side, when the price falls, you are exposed to twice the danger.
If the price of Bitcoin is on a downward spiral, the platform will urge the borrower to deposit additional Bitcoin or pay down some of the loan principal, just as it does to preserve the LTV ratio in the case of a Bitcoin-backed loan. If you fail to perform one of the two required acts, the platform has the authority to begin selling your Bitcoin holdings.
B2X Registration and Repayment Process
Whether or not the B2X strategy is advantageous to you is totally determined by the direction in which Bitcoin's price moves. If the price of Bitcoin rises, it benefits you since it doubles your Bitcoin exposure. When the price falls, on the other hand, you are exposed to twice the risk.
If the price of Bitcoin falls, the platform will encourage the borrower to deposit more Bitcoin or pay down some of the loan principle, exactly as it would in the case of a Bitcoin-backed loan, to maintain the LTV ratio. The platform has the authority to begin selling your Bitcoin holdings if you fail to fulfill one of the two mandatory tasks.
B2X: Country Restrictions
At present, Iran, Libya, North Korea, Syria, United States, Africa, and Uruguay have B2X service-related restrictions. Ledn is a platform that prioritizes privacy and security. It takes a comprehensive strategy, addressing all conceivable layers that could be vulnerable to security threats. In terms of the online site, it not only follows the conventional protocol of HTTPS and passwords, but it also encrypts its data using AES-256. They also use two-factor authentication for login and some of the platform's unique functions. In terms of privacy, users' personal information is safe because Ledn has said that it is not in the business of monetizing client information. It does not keep your information on local servers. Client information is solely kept on private networks with strict security standards.
To sign up for a Ledn account, the data that you need to provide to the platform includes your first and last name, your e-mail id, and phone number. We have already discussed the documents you need to apply for a Bitcoin-backed loan. Apart from that, you may need to provide your date of birth and home address.
Compare with Ledn alternatives
Similar Savings Accounts and Loans
| Coin | Platform | 5 Star Rating | Interest Rate (APY) |
|---|---|---|---|
| USDC | Nexo | 4 | 12% |
| BTC | Nexo | 4 | 8% |
| USDC | CoinLoan | 4 | 12.3% |
| BTC | CoinLoan | 4 | 7.2% |
| USDC | BlockFi | 3.5 | 9% |
| BTC | BlockFi | 3.5 | 4.5% |
| USDC | Midas.Investments | 4.5 | 19% |
| BTC | Midas.Investments | 4.5 | 17% |
| BTC | Celsius | 4 | 6.2% |
| USDC | Celsius | 4 | 8.88% |
| USDC | Hodlnaut | 4 | 12.7% |
| BTC | Hodlnaut | 4 | 7.5% |
| GUSD | Gemini | 3 | 8.05% |
| BTC | Gemini | 2 | 1.49% |
| BTC | Crypto.com | 3.5 | 6.5% |
| USDC | Crypto.com | 3.5 | 12% |
| USDC | Ledn | 3 | 9.5% |
| BTC | Ledn | 3 | 6.25% |
Summary
Overall, Ledn provides you with a fantastic collection of options for putting your digital assets to good use. You can not only earn up to 12% yearly interest on your idle assets, but you can also borrow money against them at 1% monthly interest. If you are a Bitcoin enthusiast who believes in the currency's long-term growth potential, the platform also offers you the chance to double your exposure.