At Ledn, we’re committed to offering competitive rates and reliable returns while always being transparent with our clients about market dynamics and how they affect our products.
Today, we’d like to elaborate on the reasons behind our upcoming adjustments to the APY on both our BTC and ETH Growth Accounts, as well as our USD Stablecoin Growth Accounts.
Changes in BTC and ETH Growth Account Rates
The rates we offer on BTC and ETH Growth Accounts are driven by our ability to lend these assets to institutional clients of the highest quality. In recent years, we've seen significant growth in the supply of BTC available for lending, with more players—such as family offices, corporations holding BTC in their treasury, and even ETF providers—seeking to earn yield on their assets.
This increased supply of BTC has impacted the market. Additionally, the high-quality market makers that we partner with are now experiencing more competition, driving down institutional lending rates. As a result, these partners are negotiating lower rates with us, which in turn affects the rates we’re able to offer to our clients.
In response to this shift in institutional demand, we are adjusting the APY on our BTC and ETH Growth Accounts to better reflect current market conditions. We remain committed to lending only to top-tier counterparties while still delivering competitive returns.
Adjusting USD Stablecoin Growth Account Rates
The rates on our USD Stablecoin Growth Accounts are tied to broader market forces, particularly the cost of funding, which is influenced by the U.S. Federal Reserve’s interest rates. Specifically, we base our rates on the Secured Overnight Funding Rate (SOFR), which is backed by U.S. Treasuries and is widely considered the risk-free rate of lending in the U.S.
We are setting the rate on our USD Stablecoin Growth Accounts at 2.5% above SOFR (subject to monthly adjustment) to ensure that our clients benefit from an attractive rate on a risk-adjusted basis.
The Benefits of This Approach
Our retail loan book, which is funded by Stablecoin Growth Account assets, has never suffered a loan loss since our inception in 2018. This impeccable track record underscores the safety of our platform, even as we offer clients funding rates at 2.5% above SOFR. We believe this offers a compelling risk-adjusted return for our Stablecoin Growth Accounts, with a solid spread over the risk-free lending rate.
Conclusion: A Commitment to Sustainability and Stability
While these adjustments reflect changes in the broader market, our core mission remains the same: To offer secure, competitive financial products that grow with you. We will continue to monitor market conditions and adjust as needed to ensure you receive the best possible rates while maintaining the appropriate asset safeguards.
We appreciate your trust in Ledn and remain committed to transparency as we navigate these changes together.
John Glover
Chief Investment Officer, Ledn
