Not all lending platforms are created equal. Understand the Ledn difference.

Amid the ongoing macroeconomic headwinds and market turbulence, we at Ledn want to assure you that not only is our business solid, but your client accounts are safe and secure. The events over the past few weeks have proven that not all digital asset lending platforms, nor digital assets themselves, are created equal.

Our business philosophy has always been centered around trust and security, and we’d like to share a few of the key things we do to highlight the importance of these priorities:

I) Proof of Reserves Attestation

We were the first lender to ever undergo a Proof-of-Reserves Attestation with a Certified Public Accountant over a year ago and publish Proof-of-Reserve Attestations every 6 months, allowing our clients to anonymously verify that their assets are included in the periodic reports. We are working on increasing the frequency of this process as we understand how valuable it is to our business and our clients.

II) Transparent Interest Generation Process

The models being used to generate interest by lending companies vary widely and market situations like this demonstrate quite clearly that all yields are not created equal. Ledn generates interest by lending assets to large institutions. This process involves robust credit underwriting policies and continual monitoring of each borrowers’ financial position. Unfortunately not all companies engage in these practices.

There are significant differences in the risk management policies and in the yield generation strategies being employed by the various lenders. It’s healthy for clients to better understand how the company they’re depositing with is generating the interest they pay. Interest rates which are well above what others are paying should raise some red flags.

III) Bitcoin & USDC focus

We only support Bitcoin and USDC, two of the highest quality and most liquid assets in the industry.

IV) Long-term vs short-term approach to DeFi

Alternative ways to generate yield in the digital asset space have involved the participation in decentralized finance (“DeFi”). This process, commonly referred to as ‘yield farming’, often involves depositing assets in new DeFi protocols in order to benefit from token rewards. If not managed appropriately, this can involve directional price risk (depositing one type of asset and expecting rewards in another type of asset), or other security risks from protocols that may not be properly audited.

Ledn has chosen not to engage in DeFi yield farming strategies with our clients’ assets. Our strategy is to lend only to qualified lending institutions that have been vetted through a rigorous due diligence process by Ledn’s risk management team. These conservative risk management constraints ensure the safety of our clients’ assets while creating safe and stable returns for our investors.

At Ledn, we are not opposed to DeFi. Over the long term, we believe DeFi protocols have the potential of fostering new ways to access finance globally. However, we believe most of the innovation will be providing more transparency around financial transactions and less about being able to generate outsized returns. We are following the progression of DeFi closely but have no plans to use client assets to generate yield in the near future.

We hope that these events will prompt clients using yield products to action their own due diligence to understand how different companies generate yield, and the risk implications from different activities. The events unfolding over the last few weeks could translate to clients asking the right questions to gain more information on how the yield they are paid is generated. Ledn will always be transparent and forthcoming, and clients can decide for themselves if they are satisfied with the answers. We respect any clients’ wishes to take their funds off platform at any time, which is why we ensure that withdrawals are always processed in a timely manner.

At Ledn, we remain focused on delivering best-in-class service, and are more than happy to answer any questions you may have. Thank you again for your trust in us and we look forward to continuing earning that trust with care and transparency.