This article is a guest contribution from Christina Comben.
If you've been following the crypto space for any length of time, you may be familiar with the name Ledn, essentially the only centralized Bitcoin lending platform that didn't collapse and burn in the aftermath of Terra/LUNA, FTX, et al in 2022. Ledn's more conservative approach to lending, custody, and risk management enabled it to navigate one of crypto's biggest crises with remarkable stability.
That didn't stop the industry from tarring the company with the same brush as its shadowy counterparts.
"Every crypto company was on fire in 2021," recalls Ledn co-founder and CEO Mauricio Di Bartolomeo, "then we went through this really tough period and had to work really, really hard to explain to clients what we were doing differently and how things were working."
One of the key contributors to Ledn's staying power is a deep commitment to transparency with users. Ledn was the first digital asset lending company to pass a Proof-of-Reserves audit, a process repeated every six months. This effort has not only seen the company recover from the depths of the grueling bear market but significantly grow its user base.
"We became profitable at the beginning of 2024," Mauricio smiles. "It's been great to see. We have a better and huge user base today than we did in 2021."
"Ledn is focused on ensuring that there are financial products for Bitcoin first," Mauricio explains.
Still, the company does support stablecoins USDT and USDC and has conceded to broader demand for loans collateralized by other digital assets by adding Ethereum.
"Our flagship product is Bitcoin and the core offering is our Bitcoin-backed loan. We allow clients to deposit Bitcoin with us and provide them with liquidity so they don't have to sell it."
Are there additional benefits of using Ledn beyond maintaining your Bitcoin holdings?
"There are tax planning advantages to loans in most jurisdictions," Mauricio says, "but the most important thing is not selling an asset that you believe is going to go up in value and you want to hold for a long time."
Mauricio prides himself on Ledn's straightforward business model.
"We're not trying to be everything to everyone. We're trying to keep our core lending products and bring them to more people." Ledn is a big proponent of quality over quantity. "One of the favorite sayings in the company is the best restaurants have the smallest menu. You don't have to do too many things, you just do a few things right. I think that's the best customer experience."
What excites Mauricio most about working in Bitcoin every day?
"I love travel, meeting people, and learning about different cultures," he enthuses. "To me, the way people use money is not about money, right? It's like, how do they think about their future? What excites them? What are their goals? You get to learn about what people are working toward when you talk about financial services, and I get to have those conversations."
He tells the story of a client in Latin America, where his co-founder Mauricio Di Bartolomeo is from and much of the Ledn team is based. The client was running a small business and Ledn's products helped him survive the COVID-19 pandemic as he could borrow against his Bitcoin when no bank would offer him a loan. "Today he's expanding," Mauricio says. "It's really a sense of joy to see how people are succeeding in their business journeys."
Ledn originated in the co-founders' Canadian hometown of Toronto and has since expanded to the Cayman Islands and grown across North America to South America and Europe. Meeting Mauricio in the speaker hall at Bitcoin MENA in Abu Dhabi, I wonder if they're looking to establish a presence in the Middle East as well.
"We're open to other regions, and we're here because we're looking to expand into the Middle East and Asia," he affirms.
Mauricio says there are different use cases of Bitcoin geographically and it's important to understand the nuances of each region. "In the US, tax is a big deal, because there's capital gains tax on Bitcoin, but a lot of jurisdictions in Europe don't have capital gains tax." In these parts of the world, HODLers are more likely to flock to Ledn to avoid reducing their stack.
While Ledn's main product is loans, the platform also offers limited trading pairs and a yield-generating product for Bitcoiners without PTSD who want to earn interest on their coins. Do they plan to add other cryptocurrencies to their lineup? "Not [beyond Ethereum] in the long term and no immediate plans but we're always considering it," he replies.
Mauricio is speaking on a panel about the future of collateral and why Bitcoin is a pristine asset.
"Property rights are a big deal," he says. "Even gold, because it's physical, is very important where it's held. If I want to finance gold, is it in the Bank of England or the Bank of Venezuela? It's a very different risk profile and because Bitcoin is digital, you don't have the same challenges with how it's stored."
"For us, Bitcoin is the great equalizer. It's the ultimate financial inclusion, and I love that because we can build the same financial products for everyone globally. It doesn't care who you are, where you're from, or what you do. It's just Bitcoin."
Since the start of the bull market, Ledn has seen a 2.5x increase in daily lending and reported $1.67 billion in loans from Q1 to Q3 last year.
"It's been extraordinary," Mauricio says. "The retail investors always got it but I think what's nice about this cycle is this time it's the businesses, the institutions are getting it because they really see a for-profit model in it."
He says the reputational risk of being in an institution four years ago during the last bull run was far higher than today. With the stigma of holding Bitcoin gone, institutions are running in—and bringing their institutional capital with them.
"The space is still incredibly short dollars," Mauricio says. "If you think about Bitcoin as a $2 trillion market cap today, the amount of retail loans on Bitcoin is probably around $1 to $2 billion, so it's still so tiny. We need more dollars in the space to allow more people to take mortgages on Bitcoin, and we need that by institutions being able to add those dollars to companies like Ledn to offer loans to retail."
Ledn moved its official headquarters from Canada to the Cayman Islands for its forward-thinking governance and friendlier regulatory pastures, after "jumping headfirst into a regulatory mess" with policy in their home country and the US. But what about the progress being made on the front with the next Bitcoin ETF?
"I mean, it's great, right?" he lights up. "Bitcoin became so polarized and it was brilliant of the Bitcoin ETF to really capture that citizen base and move on. I think now a lot of businesses that wanted to be in the space but couldn't risk taking it on until they had legal clarity are going to be able to come in."
What does that mean for Bitcoin in the months and years ahead?
"I think we're going to see institutional FOMO where several big banks are going to adopt it and everyone else will have to follow."
