As crypto assets continue to go mainstream, different ways have emerged to earn interest on Bitcoin, Ethereum, stablecoins, and other digital assets. It allows you to get yield on your crypto assets without having to sell them, allowing you to weather the market corrections.
There are currently several crypto lending platforms where you can earn interest on your crypto or obtain loans by putting your crypto as collateral. Ledn and CoinLoan are two emerging centralized finance (CeFi) platforms that offer varying interest rates and services, and today we’ll be drawing a comparison between them.
Ledn
The Canadian-based Ledn is specialized in Bitcoin borrowing and lending. Founded by Adam Reeds and Mauricio Di Bartolomeo during the bear market of 2018, it recently raised $70 million in a Series B funding round.
, which boasts of over $1.7 billion in assets under management, has its app currently available for you to download on both the Google Play Store and Apple’s App Store.This platform allows you to secure a loan against your Bitcoin as well as maximize your Bitcoin holdings by earning more BTC.
Ledn is all about Bitcoin, as such, they do not offer other cryptocurrencies. This focus on Bitcoin makes them one of the best options for Bitcoin savings accounts. It is also introducing the world's first Bitcoin Mortgage, allowing users to use their holdings to buy a new property or finance the home they already own.
Products
The three main products offered by Ledn are Bitcoin-backed loans, Bitcoin and USDC savings accounts, and B2X.
Bitcoin-backed loans facilitate liquidity for investors holding their crypto by using BTC as collateral and receiving dollars without selling your cryptocurrency. Ledn has a 50% maximum loan-to-value (LTV) ratio, which means you can borrow up to half the value of your Bitcoin.
The minimum amount you can borrow is $500 with a term limit of twelve months, but you can apply for an extension of the loan when the original loan term ends. Ledn allows you to pay off your Bitcoin-backed loan in installments.
Loan approval is also pretty fast, with funds available within 24 hours of approval from Ledn. As for how to apply, you have to sign up, provide documents such as a driving license or passport, an image of you holding either of them, proof of address, and bank details.
In its savings accounts, Ledn offers an APY of 5.25% on your Bitcoin holdings and 8% APY on your USDC stablecoin.
This product, which is available worldwide except for a few countries and a few US states, unlocks liquidity for your bitcoin holdings. As for how Ledn is able to offer such high-interest savings accounts, it's because it collaborates with the digital currency prime broker Genesis. The interest on USDC and Bitcoin is paid monthly on Ledn with compound interest.
Ledn’s savings product has no minimum balance requirement, and you are allowed to withdraw your funds at any time. Additionally, sending your BTC to another Ledn account is free, while withdrawal involves a mining fee. For the stablecoin, it’s 35 USDC.
The third product, B2X meanwhile, is a quick and simple way to double your bitcoin balance through a Bitcoin-backed loan, which is then used to purchase Bitcoin equivalent to the value of your current holdings. This product can be beneficial to you if you believe the value of Bitcoin will increase over the coming years, and by doubling your exposure to the digital assets, your gains will potentially double too.
If during this period, the value of Bitcoin falls, you can either add funds or pay off some of the principal of the loan. Ledn also has the right to sell your Bitcoin holdings if you fail to take action.
This product, however, is not available in certain jurisdictions, including the United States, Iran, Libya, North Korea, Syria, Africa, and Uruguay.
Security
For its crypto cold storage, Ledn uses BitGo, one of the world’s most respected crypto custodians. The qualified custodian for storing digital assets was recently acquired by Mike Novogratz’s Galaxy Digital for a whopping $1.2 billion.
In 2021, Ledn also released its Proof-of-Reserves, which was performed by an independent public accountant, Armanino LLP. “Ledn clients can take comfort that their bitcoin and USDC are being properly and accurately accounted for – to the satoshi, and to the cent, at all times,” noted the company at the time.
When it comes to security, the website has AES-256 encryption and recommends using two-factor authentication (2FA).
CoinLoan
The Estonia-based CoinLoan is a peer-to-peer (P2P) crypto lending platform that was founded in 2017 by CEO Alex Faliushin and Max Sapelov. This regulated crypto lender is licensed in Europe and implements Know-Your-Customer (KYC) and anti-money laundering (AML) policy.
CoinLoan caters to both borrowers and lenders as well as crypto and fiat. Its mobile app is available for download for both iOS and Android devices.
Unlike Ledn, also offers its products; borrow crypto, earn yield, and swap digital and fiat assets to corporates, as well. For this, it has an over-the-counter (OTC) desk that allows them to deal with large volumes of crypto at a predefined price and fast order processing with no settlement delays.
Products
CoinLoan offers three main products on its platform: earn, borrow, and trade.
The platform allows you to earn a yield on your crypto assets through CoinLoan Interest Account. In total, CoinLoan supports 27 currencies that cover crypto, stablecoins, and fiat currencies. A user can earn as much as 12% APY on these assets with a 2% CLT staking reward included.
CLT is the native token of , whose total supply is 22 million. Currently, CLT is trading at $19.93, -89.948% from its all-time high of $192.18 hit on 6 December 2020 at 15:29.
Interest is accrued daily and deposited on the first day of each month directly into your CoinLoan Interest Account.
To start borrowing with CoinLoan, you just need to put your crypto up as collateral to borrow as much as 70% of your holding’s value. This high LTV, however, can put savers at risk in the event of a crypto crash. In a negative scenario, CoinLoan sends an email notification about a new status of your loan so that you can add more collateral or make a few or full early repayment.
For collateral, CoinLoan supports several crypto assets, including Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), Litecoin (LTC), Bitcoin Cash (BCH), Monero (XMR), XRP, Stellar (XLM), Uniswap (UNI), Polkadot (DOT), Chainlink (LINK), Maker (MKR), Axis (AXS), Wrapped Bitcoin (WBTC), Sushi (SUSHI), Compound (COMP), YFI, and PAXG.
Meanwhile, you can receive your loan amount in crypto assets BTC, ETH, LTC, XMR, XRP, LINK, and WBTC, stablecoins including USDC, TUSD, PAX, USDT, DAI, and BUSD, and fiat currencies covering EUR and GBP.
There are three different kinds of loans available here; crypto-to-fiat, crypto-to-crypto, and fiat-to-crypto loans.
Loans on this platform are approved automatically without requiring any paperwork or credit history checks. Moreover, there are no lock-ins, fines, or hidden fees.
The minimum amount that you can borrow is $100 for a period of 30 days. The loan setup fee, however, is 1% which gets halved when paid in CLT. CoinLoan doesn’t charge any fees for crypto and fiat currency deposits, as well as withdrawals.
Another feature offered by CoinLoan is trading. You can buy, sell, and swap 24 supported assets. The platform also supports fiat deposit via SEPA, SWIFT, MasterCard, Visa, AdvCash, and wire transfers for a secure and seamless experience.
Security
When it comes to security, CoinLoan says it uses BitGo as its custodian, which has $100 million insurance cover from Lloyds. Crypto assets are stored in offline, cold, multi-signature wallets, and encrypted keys' parts are kept in the bank's safe-deposit boxes to prevent potential loss.
Other security measures taken by the lender, include Secure Cloud Infrastructure, Web Application Firewall (WAF) and DDoS Protection, Modern Encryption Standards (SSL with TLS 1.3, DNSSEC, HSTS) to secure traffic between a client browser and server, and PCI DSS Certification, SOC2, and ISO 27001.
It also performs regular vulnerability scans, has introduced a bug bounty program and uses Two-Factor Authentication.
Compare with Ledn and CoinLoan alternatives
Similar Savings Accounts and Loans
| Platform | Interest Rates (APY) | |
|---|---|---|
| Nexo | Up to 7% on BTC Up to 12% on Stablecoins ... 36 more coins | |
| OKX | Up to 5% on BTC Up to 0.08% on Stablecoins ... 196 more coins | |
| YouHodler | Up to 3.05% on BTC Up to 8.33% on Stablecoins ... 56 more coins |
Final Word
Overall, Ledn has a pretty simple model for you to take advantage of its services without involving any hidden fees. Its interface supports Portuguese-Portuguese and Spanish languages but the mobile app has very limited functionality.
Another limitation of is that the savings rate is available only for BTC and USDC, and for large BTC deposits, the rates are much lower. Moreover, Bitcoin is the only cryptocurrency acceptable as loan collateral.
But still, this platform allows you to automatically buy more bitcoin with a loan secured against your existing BTC, and there is only one interest payment at the end of the 12-month term. Additionally, proof of the company's crypto reserves is provided by a major accountancy firm.
When it comes to CoinLoan, this crypto loan platform has a very easy setup and registration process as well as a good variety of supported assets. It has a simple and intuitive web and phone app and interface that supports Russian and German.
actually supports both crypto and fiat for lending as well as earning that too with instant access to high savings account interest rates.There are no credit checks here and no hidden fees. However, users need to stake CLT to get better interest rewards, and not a lot of loans are available to invest in either. There is also a lack of transparency in the storage of the assets. But the platform has a high LTV of up to 70% with daily compound interest and offers corporate accounts and 24/7 customer support.
Now that you know what each platform has to offer you and its respective limitations, you can choose the right option for yourself.