Ledn Review | Earn 6.25% Interest On Your BITCOIN - Loans & Savings Accounts a Good Idea?
Summary
TLDRIn 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
- ๐จ๐ฆ Leddin is a Canadian company based in Toronto, offering Bitcoin banking services.
- ๐ฆ Leddin functions as a middleman, lending out Bitcoin to partners like Genesis Capital for further lending or investment.
- ๐ They offer high interest rates: 6.25% on Bitcoin and 9.5% on stablecoins like USDC, significantly higher than traditional banks.
- ๐ป The platform has a user-friendly interface, similar to a traditional online banking experience.
- ๐ฐ Leddin provides easy access to capital through Bitcoin-backed loans, simplifying the borrowing process.
- ๐ซ However, Leddin is a custodial service, meaning users give up control of their Bitcoin or stablecoins to the company.
- ๐ Custodial solutions can be a privacy concern, as Leddin has visibility over users' holdings and transactions.
- ๐ Leddin can help users avoid capital gains tax on Bitcoin sales by offering loans, which are considered neutral tax events.
- ๐ Users must comply with KYC (Know Your Customer) requirements to use Leddin's services.
- ๐ก The withdrawal process from Leddin can be slow, requiring user requests and company responses, which took three days in one user's experience.
- ๐ซ 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
๐ 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.
๐ 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.
๐ค 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.
Mindmap
Keywords
๐กLedger
๐กInterest Rate
๐กStablecoin
๐กBitcoin
๐กCustodial
๐กCapital Gains Tax
๐กLoan to Value (LTV)
๐กLiquidation
๐กKYC Requirements
๐กBitcoin-Backed Loan
๐กNon-Custodial
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
5.0 / 5 (0 votes)