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.