Our Experience Using Ledn & How it Compares (Nov-2021)
Ledn is a smaller crypto-interest and loan platform that is actually quite competitive in it’s offerings, particularly it’s crypto interest (savings) account.
To give a quick summary — Ledn is a great option to diversify your crypto-savings and lending to, as they offer relatively competitive interest rates better than many platforms and on-par with the best platforms, however their loans (including the B2X program) is not a very good option due to the high interest fees they charge.
Overall we keep some bitcoin with Ledn, and believe it’s a good platform for that, but there’s better options if you’re taking a loan out or wanting to leverage your cryptocurrency in one way or another — we’ll talk more about alternatives below.
Ledn Crypto Savings & Interest Account Review:
Ledn has a good interest/savings account when it comes to lending out bitcoin or USDC — they offer best-in-class rates right along with Celsius for these two coins, offering 6.25% for BTC deposits and 9.5% for USDC deposits. For reference Celsius offers 6.2% on bitcoin and 10% to 12% on USDC (or other stablecoin) deposits currently — other competitors such as Nexo generally also about 1% less in interest, or about 10% -> 20% less than Celsius and Ledn offer on deposits.
With that being said, there are issues with Ledn’s Crypto Savings & Interest Accounts — namely they ONLY offer interest on Bitcoin and USDC deposits, meaning they do not offer interest on Cardano, Polkodot, Ethereum, Aave, or any other altcoins. That’s a major disadvantage compared to Celsius or BlockFi which both offer best in the industry interest on over a dozen other altcoins that Ledn’s doesn’t offer interest on.
Basically if you just want to earn interest on some Bitcoin or USDC then Ledn is a good option, but if you also want to earn interest on ethereum or altcoins you’d probably be better off using another platform like Celsius, or simply use them both if you don’t mind the hassle of using two different platforms.
Ledn B2X & Crypto-backed Loans Review:
Ledn’s Crypto Backed Loans and B2X program to be quite honest simply is not very good — they charge high fees (9%+/year in interest) compared to other loan providers such as Celsius Network which charge as low as 1% in interest per year. While they only offer 50% LTV loans (very risky) on the surface, Ledn confirmed with us that you can in fact add more collateral to make your LTV lower (and thus safer) at any time — it just won’t lower your interest rate.
Overall if you want a loan we’d say don’t bother using Ledn for that — instead go with Celsius as they offer 1% interest loans and a variety of LTV ratios from 25% to 50%, making you the one who decides how much risk you will take or how much leverage you’re comfortable with and benefiting from lower interest rate fees.
If you don’t like Celsius, then BlockFi also offers decent loans, with a variety of LTV’s and better terms than Ledn offers — they have slightly higher fees than Celsius for loans, which is why Celsius is our first choice for loans, but BlockFi isn’t a bad choice either.
How Does Ledn Compare to it's Competitors?
As mentioned earlier in the article while Ledn is a good option for earning some interest on bitcoin, it’s otherwise not very comptitive to it’s competitors — Ledn has a very limited selection of cryptocurrencies they offer interest on (namely exclusively bitcoin and USDC) and has very high interest rates and overall not so great terms for their loan and leverage products.
Crypto-backed Loans & Leverage
To put it simply and plainly, if you want to take a bitcoin-backed loan, or other crypto-backed loan, Celsius is by far the best choice and significantly better than Ledn — not only do they accept many different cryptocurrencies as collateral but they also offer loans for as little as 1% interest. You can easily take a loan out and buy crypto with it, effectively mimicking Ledn’s B2X program but with much more flexibility and likely lower rates/fees.
Aside from Celsius, which in our opinion is the best crypto-backed loan platform there are a few other decent options for crypto-backed loans, including both centralised and decentralised options — we have an article all about the best crypto-backed loan platforms as well if you want to read more about alternatives.
Crypto Lending & Savings
If you’re interested in lending out cryptocurrencies for interest, like Ledn’s Savings account offers, we’d say if you’re doing Bitcoin-lending Ledn is a good option, however as they do not offer interest on other cryptoassets we’d say Celsius or BlockFi are better choices overall as they both offer best-in-industry rates without any of the restrictions (lock-up periods) that other platforms sometimes have.
You can read our comparison of BlockFi and Celsius by clicking here — but in short Celsius offers better yields on some cryptocurrencies if you have large quantities, and offers better crypto-backed loans, while BlockFi offers better yields on smaller balances of certain cryptocurrencies — overall we prefer and use Celsius more.
Ledn Crypto FAQ:
Below we’ll go over some of the common questions we see asked about Ledn; if you have another question or two feel free to message us through our contact page and we’ll try to get back to you as soon as possible — and maybe add the question to the list below!
Is Ledn Safe to Use?
Ledn uses standard security features all legitimate cryptocurrency platforms use — encryption on their website, secure cold-storage or collateralized partner wallets, etc, and hasn’t been hacked or had other security breaches as far as we know of — so they’re safe to use in this respect. They also are insured with BitGo so in case anything happened you should be covered.
Is Ledn Regulated & Insured?
Yes, Ledn is regulated & Insured, however these regulations and insurances are not like that of many banks. For example Ledn isn’t FDIC insured or SIPC insured, but instead is insured through a 3rd party company called BitGo — they provide insurance in case of hacks and other not-your-fault losses of funds, however if Ledn goes bankrupt for some reason there is no guarantee you’ll receive all your funds back, but instead would be given compensation during the bankruptcy process.
Overall Ledn is regulated & insured, however only up to par with other cryptocurrency platforms, and this doesn’t mean there’s no risk in using the platform. It’s possible something goes wrong with the company, or who they work with, and it’s possible you lose funds with them — albeit very unlikely (in our opinion).
How Does Ledn Make Money?
Just like with other cryptocurrency lending platforms they take a small percent of the interest they generate on their crypto-savings and interest accounts. They also use the collateral people put up for loans to generate yeild that they keep entirely for their self — which is insanely profitable for them.
They likely have other forms of making money, including a small spread on trades on their platform or holding crypto and lending out crypto their self, however these likely aren’t how they make most of their money, and we’re just speculating that they make money from such things — they haven’t specified if they make money from such things currently as far as we’ve seen.
Does Trading on Ledn Have Hidden Fees?
Yes, while Ledn claims to have ‘no fee trading’ in practice this is just marketing propoganda and it’s not entirely true. While Ledn doesn’t charge a ‘commission’ on trades, or a trading fee, all trades done on the platform seem to have a 1% markup (if buying) or markdown (if selling) over the actual price you can find on regular cryptocurrency exchanges.
This means in practice there’s a 1-2% fee on Ledn trades, which is less than some platforms such as coinbase, but it’s quite a bit more than most platforms.