Company Name: Ledn
Founders: Mauricio Di Bartolomeo and Adam Reeds
Date of establishment: September 2018
Headquarters location: N/A (Totally Far)
Number of Employees: 51
Website: https://ledn.io/
Public or Private? What is confidential
“Lending is a type of relationship where you value the return of your assets in addition to returns to your property.”
This was Di Bartolomeo’s answer when I asked him what set Ledn, a platform for borrowing and lending bitcoin and crypto, apart from its competitors, including now defunct companies that offer similar services such as BlockFi, Celsius and Voyager.
“No company in this space has a better track record of getting your assets back than Ledn,” Di Bartolomeo told Bitcoin Magazine.
Since its inception, Ledn has prioritized safety and reliability. Di Bartolomeo and his co-founder, Adam Reeds, sought not only to gain the trust of the traditional financial institutions with which Ledn interacts but also of Ledn’s global user base, some of whom are accessing financial services for the first time thanks to the company.
And Di Bartolomeo’s work is personal to him in part because he understands the importance of Bitcoin because of his personal experience with it in his home country of Venezuela.
Di Bartolomeo’s Bitcoin Journey
“My family found Bitcoin and started mining in Venezuela in late 2014/early 2015 during hyperinflation where it was basically illegal for them to buy or hold US dollars or anything that would hold value,” Di Bartolomeo recounted.
“When I saw how they and other Venezuelans were using Bitcoin to get out of their broken system, I thought “How many people in the world live like this and how many people in the world will need this?” And my answer was a number that I can’t count in my head,” he added.
Di Bartolomeo decided to start working in the Bitcoin space soon. He moved to Canada where he and Reeds began helping miners increase their operations. Di Bartolomeo recalled that these miners wanted to expand but did not want to sell their bitcoin to do so.
“They had bitcoin income and fiat expenses, and there was no real place for them to get any kind of funding,” Di Bartolomeo said.
“We sought financing, but no one would lend to us. So, we decided to solve our problem,” he added.
“That was the beginning of Ledn.”
How Ledn Differentiates Themselves
When Ledn was founded in 2018, there were few other services like it. However, there were significant differences between Ledn and its competitors.
“There were other bitcoin lenders in the market, but they needed tokens,” Di Bartolomeo said.
“This was around the ICO era and we saw Nexo and Celsius coming into the space with tokens. My opinion was that they were just using it to get money without selling equity,” he added.
Di Bartolomeo and Reeds did not want to issue the token, as they saw it as a questionable practice from a regulatory point of view.
“When you look at finance in terms of scale, you immediately think in terms of regulation,” said Di Bartolomeo. “We wanted to build a company that could sit in front of BlackRock or Goldman Sachs, the banks that are heavily regulated, and say, ‘Hey, I want to work with you guys.’
In addition, Ledn also prioritized transparency. In 2021, it became one of the first major Bitcoin companies to issue proof of reserves, a system that allows anyone to check Ledn’s bitcoin holdings.
“It is still the only lender operating in the US or other highly regulated markets that has this proof of savings that every six months our customers come to check,” said Di Bartolomeo. “We’ve been doing this since before it was cool.”
Ledn also publishes a monthly Open Book report that breaks down Ledn’s lending strategies.
From the beginning, Di Bartolomeo believed that taking buttons and a transparent approach would promote trust among Bitcoin enthusiasts, a group that lives by the mantra “don’t trust, verify”, and his thesis has played out well.
Reducing Risks
Of the many products Ledn offers, one generates a yield in bitcoin – the same type of product that caused the demise of BlockFi.
However, Ledn is looking at its version of this product differently than its previous competitor.
“We generate Bitcoin yield in bitcoin primarily by lending it to market makers who have settled the BlockRock IBIT ETF and Coinbase spot units,” said Di Bartolomeo.
“These groups do not match the price. They have no direct exposure. They just close the price gap and benefit from the volatility,” he added.
BlockFi’s approach was very risky.
“With BlockFi, there was a long-term mismatch,” explained Di Bartolomeo.
“They were taking time deposits, and they were investing in mining infrastructure with a five-year payback. What do you think will happen if someone comes before the five years are up?” he added, referring to the idea that what happened to BlockFi seems inevitable.
In addition, Ledn works only with highly liquid assets such as bitcoin (and ether, which they added in 2023), which helps reduce the risk of asset credit mismatch.
“With bitcoin, you always have people on both sides of the house with demand,” Di Bartolomeo said.
“If you start backing things like Shiba Inu or Dogecoin and people want to get interest on those, you have to convert that Dogecoin into something else, and create a mismatch of asset debt in the process,” he added.
Di Bartolomeo also noted that all Ledn products are ring-fenced from each other.
“If you pay off the last loan, you are not exposed to the credit risk of our other products,” he said. “This is very similar to how traditional finance works, and it’s something we do very differently compared to our late peers.”
Growing Competition
As more people begin to view bitcoin as “pure collateral,” more bitcoin lending and borrowing platforms are set to emerge. Many already have.
Centralized bitcoin lending and borrowing services such as Salt and Nexo remain in competition with Ledn, while institutional bitcoin financial services such as Newmarket Capital’s Battery Finance are also poised to enter Ledn’s business. And services that allow users to borrow against their bitcoin informally, including Debifi and Lava, could also increase their market share.
Di Bartolomeo is aware of the competition but doesn’t seem worried. In fact, he believes that in such a market, the biggest winner will be the buyer, and he has no plans to change Ledn’s strategy. Instead, he’s looking to double down on what Ledn does best.
“Our sweet spot will be people or people who prioritize transparency, financial security and compliance,” Di Bartolomeo said.
“Safety, trust and transparency is what makes Ledn stand out. There is no other operator like us in this space with the same track record in terms of loans worked, years in business and cycles survived,” he added.
“This industry is changing. You have to have the right skills and the right set of values to empower your team, and I think other companies would be hard pressed to show what we have in the time we have. Will you be able to find something cheaper? Yes. Will that be too dangerous? Absolutely.”
Promoting Investment
One of the main ways Ledn differs from traditional lending and borrowing platforms is that its rates do not vary based on the location of the borrower or lender.
“This makes people feel very empowered because they know that whether they are in Madrid or Medellín, they get the same quality,” said Di Bartolomeo.
And Di Bartolomeo smiled from ear to ear as he discussed this point, as it seemed to remind him why he got involved with Bitcoin in the first place.
“This is one of the things that makes me proud of this business,” he said.
“We have people who have returned from Latin America who came to us to say that we are the first loans ever approved. This is because what we are looking at is ‘Have you completed KYC?’; ‘Are you a compliant citizen?’; ‘Do you have Bitcoin?,’” he added.
“It’s not ‘Where do you live?’; ‘Who are your parents?’; What color is your skin?’ I love this feature of Bitcoin and what it does. “