Crypto lender Ledn is set to offer 8.5% APY on USDT savings deposits from early October. Meanwhile, users’ existing USDC savings are transitioning to these new Growth Accounts from today.
The Cayman Islands-based firm will utilize the new USDT Growth Accounts to bolster its retail loan book, according to a statement. Borrowers must over-collateralize their loans on the platform, enabling Ledn to back the funding from the Growth Accounts with their bitcoin deposits.
Ledn’s previous USDC and Bitcoin Savings Accounts were split into a non-interest earning Transaction Account and an interest-earning Growth Account, starting with its Bitcoin Growth Accounts on Aug. 3 — which offers up to 1% APY. Its USDC Growth Accounts transition has gone live today at the same 8.5% APY rate, with USDT to follow next month. Users can freely switch between the Transaction and Growth Accounts to ensure control over their assets, Ledn said.
Ledn claims it offers the crypto industry’s highest stablecoin yield, compared to current rates of up to 5.4% on DeFi lending platforms like Compound, Aave and the Maker-powered Spark Protocol. While crypto yields are down compared to 2021 bull market peaks, Ledn’s 8.5% APY is also higher than the up to 5.5% currently available in traditional money market funds — a type of cash alternative consisting of short-term government debt securities like Treasury Bills.
“We have listened to the industry’s demand for a new way to earn yield in a safer and more transparent manner,” Ledn co-founder and CSO Mauricio Di Bartolomeo said. “For me, the yield combined with the collateralized status of these accounts makes this a great alternative to Treasury Bills.”
Ledn’s ring-fenced USDT, USDC and bitcoin accounts
Ledn’s Growth Accounts come partly in response to the collapse of several centralized lending platforms in 2022 — including the bankruptcy of firms like Celsius, BlockFi and Voyager Digital — which severely impacted trust in the sector.
In an interview with The Block in April, Di Bartolomeo said that the company successfully navigated the crisis by diversifying away from its initial sole partner, Genesis. Through introducing its Open Book Report and a revamped client dashboard, Ledn argues its Growth Accounts provide more transparency in how they generate yield.
Furthermore, the Growth Accounts are legally ring-fenced — meaning that users are only exposed to the counterparties generating their yield, are shielded if Ledn ever went bankrupt, and are not exposed to the risks of each type of account. For example, USDT Growth Accounts are not exposed to the risks of USDC Growth Accounts and vice versa.
Ledn also argued it offered a “bitcoin and stablecoin savings experience outside of exposing clients to the risks associated with decentralized finance protocols, which continue to be scarred by a consistent stream of hacks and exploits.”
Last month, Ledn opened a crypto-native path to a “Golden Visa,” joining forces with crypto real estate broker Parallel to enable investors to finance and acquire Cayman Islands properties by leveraging their digital assets.
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