Ledn Review | Earn 6.25% Interest On Your BITCOIN - Loans & Savings Accounts a Good Idea?

Summary

In this review, Darren explores Leddin, a Canadian Bitcoin banking service offering high-interest savings accounts and loans secured by cryptocurrency. With interest rates significantly higher than traditional banks, Leddin provides an attractive alternative for Bitcoin holders. However, as a custodial service, it raises concerns about privacy and control over assets. Darren also discusses the tax implications and the ease of accessing capital through Leddin, weighing the pros and cons for potential users.

Takeaways

• 🇨🇦 Leddin is a Canadian company based in Toronto, offering Bitcoin banking services.
• 🏦 Leddin functions as a middleman, lending out Bitcoin to partners like Genesis Capital for further lending or investment.
• 📈 They offer high interest rates: 6.25% on Bitcoin and 9.5% on stablecoins like USDC, significantly higher than traditional banks.
• 💻 The platform has a user-friendly interface, similar to a traditional online banking experience.
• 💰 Leddin provides easy access to capital through Bitcoin-backed loans, simplifying the borrowing process.
• 🚫 However, Leddin is a custodial service, meaning users give up control of their Bitcoin or stablecoins to the company.
• 🔒 Custodial solutions can be a privacy concern, as Leddin has visibility over users' holdings and transactions.
• 📉 Leddin can help users avoid capital gains tax on Bitcoin sales by offering loans, which are considered neutral tax events.
• 📋 Users must comply with KYC (Know Your Customer) requirements to use Leddin's services.
• 💡 The withdrawal process from Leddin can be slow, requiring user requests and company responses, which took three days in one user's experience.
• 🚫 The reviewer expresses a personal preference for non-custodial solutions, valuing the control and privacy that comes with self-custody of Bitcoin.

Q & A

What is the main focus of the video review?

The video review focuses on discussing the services provided by Ledin, a Canadian company that offers bitcoin savings accounts and loans, and whether such services are worth using.

What type of company is Ledin?

Ledin is a bitcoin bank based in Toronto, Canada, offering savings accounts with interest and loans for bitcoin and stablecoin.

How does Ledin generate high interest rates for its savings accounts?

Ledin acts as a middleman, lending out the deposited bitcoin to partners like Genesis Capital, which then uses it for further lending or investing to provide high interest rates to the end users.

What are the current interest rates offered by Ledin for bitcoin and stablecoin?

Ledin offers an interest rate of 6.25% on bitcoin and 9.5% on stablecoin, specifically USDC.

How does Ledin make it easier for new users to get started with bitcoin savings?

Ledin provides a user interface similar to traditional online banking, making it familiar for users to manage their account balances, interest earnings, and transactions.

What is the advantage of using a bitcoin-backed loan from Ledin?

With a bitcoin-backed loan, access to capital is easier as it only requires an account and the asset itself, unlike traditional loans that require extensive application processes.

How does Ledin help users avoid capital gains tax on bitcoin?

Taking out a loan against bitcoin is considered a neutral tax event, as the user is not selling the bitcoin but merely using it as collateral, thus avoiding capital gains tax on the asset's appreciation.

What are the main disadvantages of using Ledin's custodial services?

The main disadvantages include giving up control of the bitcoin or stablecoin to Ledin, which could potentially lead to loss or misuse of the assets, and the compromise of privacy due to the need to share personal information and transaction details.

What are the KYC requirements for creating an account on Ledin?

Users are required to provide personal information to comply with Know Your Customer (KYC) regulations when creating an account on Ledin.

What is the process for withdrawing bitcoin from Ledin's platform?

The withdrawal process involves requesting a withdrawal and waiting for Ledin's response to send the bitcoin to the user's personal wallet, which can take up to three days.

What are the terms and conditions for a loan on Ledin?

Ledin offers loans at a 50% loan-to-value ratio, with a minimum loan amount and an annual interest rate of 9.5% plus a 2% admin fee, totaling 11.5% per year.

What is the risk of liquidation when taking out a loan against bitcoin with Ledin?

If the price of bitcoin drops significantly, the user may be asked to provide more collateral to maintain the loan. Failure to do so could result in liquidation, where Ledin sells the collateral to cover their losses.

What is the reviewer's personal stance on using custodial services like Ledin?

The reviewer is not fully comfortable with the custodial nature of Ledin's services, as they believe in self-custody and the long-term future of bitcoin, and does not find the interest rates offered worth the risk of giving up control.

What alternatives does the reviewer suggest for non-custodial bitcoin loans?

The reviewer mentions Unchained Capital as an alternative for non-custodial, multi-signature bitcoin loans, although it is currently only available for Americans.

Outlines

00:00

🌟 Introduction to Ledger and Bitcoin Interest Earning

Darren introduces Ledger, a Canadian Bitcoin banking service based in Toronto, offering savings accounts with high interest rates and loans for Bitcoin users. He shares his personal experience with the platform, explaining its operations, benefits, and his opinion on its value. Darren highlights the significantly higher interest rates offered by Ledger compared to traditional banks, which can be up to 900 percent more. He also discusses the ease of accessing capital through Ledger, the potential for avoiding capital gains tax, and the importance of doing one's own research due to the complexity of financial protocols.

05:01

🔑 Ledger's Custodial Nature and Bitcoin Loan Process

The speaker delves into the custodial aspect of Ledger, where users must send their Bitcoin or stablecoin to the company, raising concerns about the loss of control over one's assets. He outlines the Know Your Customer (KYC) requirements for account setup and describes the process for Bitcoin savings accounts, including the interest rate, withdrawal process, and the time it takes to receive funds. Darren also explains the loan process, including the loan-to-value ratio, minimum loan amounts, interest rates, and admin fees. He provides scenarios for how loans can be profitable or risky, especially in the case of market downturns leading to liquidation.

10:02

🤔 Personal Opinions and Comparison with Other Services

In the final paragraph, Darren shares his mixed feelings about Ledger. While he appreciates the service for its ability to provide loans against Bitcoin and its utility for both personal and business purposes, he expresses reservations about its custodial nature. He believes that giving up control over one's Bitcoin for the sake of earning interest may not be worth it in the long run. Darren also mentions his preference for non-custodial, multi-signature loan solutions like those offered by Unchained Capital, which are currently only available to Americans. He invites viewers to share their experiences with Ledger and similar platforms and offers his assistance for any questions regarding the process.

Keywords

💡Ledger

Ledger is a Canadian company that operates as a Bitcoin bank, offering savings accounts and loans against Bitcoin. It is central to the video's theme as it is the service being reviewed. The script discusses Ledger's services, interest rates, and the process of using their platform for savings and loans.

💡Interest Rate

Interest rate refers to the percentage of return on investment over a specific period. In the context of the video, Ledger offers significantly higher interest rates on Bitcoin and stablecoin savings compared to traditional banks, which is a key selling point discussed by the reviewer.

💡Stablecoin

A stablecoin is a type of cryptocurrency designed to minimize price volatility by pegging it to a stable asset like the US dollar. In the video, Ledger offers a high interest rate on USDC, a stablecoin pegged to the US dollar, making it an important concept for users looking to earn interest on a less volatile asset.

💡Bitcoin

Bitcoin is a decentralized digital currency that operates on a peer-to-peer network and is the primary focus of the Ledger services reviewed in the video. The script discusses earning interest on Bitcoin, taking loans against it, and the tax implications of selling Bitcoin.

💡Custodial

Custodial refers to a service that holds customers' assets, in this case, Bitcoin or stablecoins, on their behalf. The video highlights the potential risks of using a custodial service like Ledger, where users give up control of their assets to the platform.

💡Capital Gains Tax

Capital gains tax is a tax on the profit made from selling assets for more than they were purchased. The video discusses how using Ledger to take a loan against Bitcoin can be a strategy to avoid this tax, as the loan is considered a neutral tax event, not a sale.

💡Loan to Value (LTV)

Loan to Value (LTV) is the ratio of a loan amount to the value of the asset used as collateral. The script explains that Ledger offers loans at a 50% LTV, meaning for a $1,000 loan, $2,000 in Bitcoin is required as collateral.

💡Liquidation

Liquidation in the context of loans refers to the process where a lender sells the collateral to cover losses if the borrower defaults. The video mentions the risk of liquidation if the value of Bitcoin drops significantly after taking a loan.

💡KYC Requirements

KYC stands for 'Know Your Customer' and refers to the identity verification process required by financial institutions. The video mentions that Ledger requires KYC compliance for account creation, which involves sharing personal information.

💡Bitcoin-Backed Loan

A Bitcoin-backed loan is a type of loan where Bitcoin is used as collateral. The video explains the ease of accessing capital with such loans on Ledger, as opposed to traditional loans that require extensive documentation and credit checks.

💡Non-Custodial

Non-custodial refers to services where users retain control of their private keys and assets. The reviewer expresses a preference for non-custodial solutions in the future, as they believe in the principle of 'not your keys, not your coin', indicating a desire for greater control over assets.

Highlights

Ledger is a Canadian Bitcoin bank offering savings accounts and loans for Bitcoin.

They act as a middleman, lending out Bitcoin to partners like Genesis Capital for further lending or investing.

Ledger provides high interest rates of 6.25% for Bitcoin and 9.5% for stable coins like USDC.

Their interest rates are significantly higher than traditional banks, up to 900% more.

The platform is user-friendly, similar to logging into a bank account.

Ledger allows easy access to capital with Bitcoin-backed loans, simplifying the traditional loan process.

Using Ledger can potentially help avoid capital gains tax on Bitcoin sales in Canada.

Ledger is custodial, meaning users give up control of their Bitcoin or stable coins to the platform.

Custodial solutions can be a privacy concern as Ledger has visibility over user transactions.

Users must complete KYC requirements to use Ledger's services.

Bitcoin savings account with Ledger offers a 6.25% interest rate.

Withdrawals from Ledger can be slow, taking up to three days and requiring user contact for processing.

Ledger's USDC savings account provides a 9.5% interest rate, pegged 1:1 to the US dollar.

Loans from Ledger are at a 50% loan-to-value ratio, requiring double the loan amount in collateral.

Loans have a minimum amount and an annual interest rate of 9.5% with a 2% admin fee.

Ledger offers a BTX loan, allowing users to double their Bitcoin on the spot.

There's a risk of liquidation if the Bitcoin price drops significantly below the loan collateral value.

The reviewer appreciates Ledger's existence but is hesitant due to the custodial nature of the service.

The reviewer prefers non-custodial, multi-signature solutions for Bitcoin loans in the future.

Transcripts

if you're looking for a review on leddin

or where to store your bitcoin to earn

interest

this video is for you my name is darren

i've personally used london myself i'm

going to tell you my experience how it

works my opinion of it and if apps like

this are really worth it we're going to

cover lead in the company getting

started their savings accounts their

loans

and if i recommend

lead in as a good tool for bitcoin so

ledden is actually a canadian company

they're based out of toronto so i

thought i'd give them some love as i

like to make canadian content

essentially what ledden is is a bitcoin

bank they offer savings accounts in

which you can get interest and loans for

your bitcoin so how do they do that well

you actually send them your bitcoin or

your stablecoin they're kind of a

middleman in which they lend out that

bitcoin to somebody like genesis capital

in which they're partnered with and they

use that for more lending down the line

or investing

in order to get a high interest savings

rate

for you the end user now why would you

use something like ledin well number one

is the interest rate

current interest rates at banks are

anywhere from 0.5

to

1.3 i believe is the best interest rate

you can get in canada today leddin

offers 6.25 on your bitcoin and nine and

a half percent on your stable coin and

they only accept usdc these are crazy

numbers up to 900 percent higher than

traditional banks where you would store

canadian dollars london kind of makes it

easier slash more familiar for new

people getting in a lot of people are

used to kind of logging into their

banking account by now online kind of

the same feel as logging into a bank

account um where you're gonna see all of

your account balances how much interest

you've made each year and there's ways

to transfer in and out your bitcoin or

your coin it's also a really great way

to access capital so with lead in all

you really need is an account and the

asset itself in order to get a loan in

the real world getting a loan is a lot

more tricky than that you're going to

need to apply you're going to need to

give your income you're going to need to

give your credit score and hope that

you're going to be approved for this

loan

with

a bitcoin backed loan all you really

need is the asset and you're good to go

so access to capital is extremely easy

for individuals or businesses in the

real world i've seen businesses friends

family members not be able to access

loans because of their credit history so

by just owning bitcoin the asset

yourself you're opening the door for

loans for you in the future against that

also leddin can be used as a way to

avoid capital gains tax so bitcoin when

you sell it is actually considered

capital gains here in canada so it's the

same as selling a house or selling your

stocks when you sell it for profit

you're going to be taxed on that profit

it's all based on your income level how

much you've sold it's different for

every individual person so when you

actually take out a loan against your

bitcoin it's considered a neutral tax

event so you're not actually selling

your bitcoin you're just putting it up

front and getting some money back now

what you do with that money or bitcoin

you've received can be taxable and it

might not be completely non-taxable

because

if you do get liquidated which means

price goes down and they take your asset

as you're unable to pay it back

that would be considered a sale and a

capital gains

from where you originally bought it now

none of this is financial advice i'm not

a financial advisor

accountant anything like that so you

need to do your own research there's so

many different nuances in the protocol

how you use bitcoin or stable coins

individually so why would you not use

lead in or what are the negatives of

lead in so number one they are custodial

and this means you're sending them your

bitcoin or your stable coin completely

in their possession if one day they

decide to lock you out of that

sell it lose it there's nothing you can

do the power isn't completely in their

hands this kind of goes against one of

the most famous sayings in bitcoin is

not your keys not your coin so they

actually have the keys to all of your

bitcoin again to do whatever they want

with and you're powerless not saying

they're gonna lose it or do that they

just have that ability to do also

custodial solutions are terrible for

privacy because you're going to be

sending them how much you own they're

going to be seeing how much interest

you've gained how much you've sold or

deposited on the app so this idea of

custody kind of goes against what

bitcoin stands for there's tons of

reasons why you would want to

self-custody your bitcoin yourself and

there's lots of videos on that so make

sure you do your research and you're

comfortable giving up your possession of

your coins that's kind of the big

picture near negatives i'll go into

smaller negatives as we go along with

the review so to start you're going to

need to follow kyc requirements for lead

in so this is giving up your information

in order to create an account so when

you first log in to lead in they have

all of these different tabs first one

we're going to cover is the bitcoin

savings account what you're probably all

here for

where you can get 6.25

interest on now i have used this in the

past and i currently have this amount

stuck in

here and i don't really know why now if

you're familiar with any other bitcoin

transaction it works just the same so

you're going to deposit into a wallet

address so this can be from your

exchange or from your own address and

withdrawing is actually a process of you

requesting to withdraw this is one of

the negatives i see with lead in it

actually took me three days in order to

withdraw my bitcoin off the platform and

you actually have to contact them and

wait for their response

to send it to your own personal wallet

so i wish i could see something where

you could just

press withdraw and it goes straight to

your wallet that instant you're going to

have all of your transaction details

here

so if we do some calculations after a

year you deposit half a bitcoin this is

what you're going to get

per year now the interest rate does

change from time to time but they give

you a heads up about this and you do get

paid out every month so you're going to

get an email every month saying you've

got this interest and that's pretty good

feeling that you've just

gained some more bitcoin a usdc savings

account works exactly the same way

they give you 9.5 interest and what usdc

is is a stable coin it's always

following the us dollar and it's pegged

one to one so what you're gonna do is

deposit it just the same to a wallet

address and the withdrawal process is

the same now we're going to cover loans

on lead in so let in loans are a 50 loan

to value which means you have to

whatever you put up you will get 50 of

that back if you want a thousand dollar

loan you have to put up two thousand

dollars in order to get the loan for a

thousand dollars now they do have a loan

minimum and right now that loan minimum

is around a thousand dollars it is 9.5

annual interest on that loan with a two

percent admin fee so this adds up to

11.5

per year so these are the fees you're

going to pay

if you have it for a full 12 months now

you're going to receive your funds

either in usdc straight to your bank

account i believe it's via wire transfer

or you can receive this in that stable

coin to a wallet of your possession

again one negative with lead in it's

just usd

so this is great if you're an american

but if you're canadian you probably want

a u.s bank account for this or talk to

your bank make sure you're able to

accept usd if you take out a loan this

way now we're gonna move to what they

call a btx loan so this essentially

allows you to double bitcoin on the spot

so you're gonna transfer a specific

amount of bitcoin and they're gonna buy

that specific amount of bitcoin giving

you a final wallet balance of double

what you've put up so a lot of people

actually use

loans on their bitcoin to buy more

bitcoin if you don't already know that

so this kind of eliminates that step of

taking out a loan in us dollars then

going to buy it somewhere else and then

coming back to the

let in to pay it off in us dollars this

kind of just keeps it all in bitcoin um

where you can double your bitcoin amount

and they have the same fees as if you

took out a dollar loan with them so

let's kind of go over some scenarios if

the price was to stay flat for your

entire year you had this loan all you're

going to really be paying is the fees

for that specific loan so if the price

rises from where you took out the loan

this is where you can actually make

profits when taking out a loan against

your bitcoin now if the price falls you

are at risk of what is called

liquidation so let's say if the price

drops 50 percent they might ask you to

put up more collateral in order to keep

your loan afloat if you do not put that

capital they can

take your initial upfront investment and

what's called liquidate it so they sell

it on the spot to cover their loss

you'll get the notifications before they

do this and when you open that loan

they'll give you all of the details of

the specific levels in which you will

need to repay it back in order not to

get liquidated so overall i'm happy that

a company like ledden exists it gives

that great option of taking out a loan

against your bitcoin loans are super

important not only for personal use but

for business uses it gives a way for a

bitcoin owner to take out a loan just

based on the value of their asset they

have and it's really good that a company

like ledin

sees the value in that asset and is

willing to risk it in order to give out

a loan for it now they are custodial so

for all of your loans and all of your

savings you're going to be giving up the

power to them so for me that's a risk

that i'm not really willing to take

because i believe in the long-term

future of bitcoin getting six percent or

something like that

for a year and giving up all of the

power that bitcoin brings

not really worth it in my opinion now it

is a good step for new people getting in

or if you do need to take out those

loans now i will go back to ledden if i

do ever want to take out a loan against

my bitcoin that is until there's like a

non-custodial multi-signature solution

of taking out a loan like unchained

capital has but currently that's only

available for americans so i'll be

looking to

that type of loan in the future if i

ever need to instead of a custodial

version so let me know what you guys

think of lead in

other apps like this such as block fi

celsius

kind of give me your experience or any

questions you might have about the whole

process i'll be happy to help and thanks

for watching