Crypto lender Ledn will remove Ether (ETH) as loan collateral by July 1, 2025, refocusing on Bitcoin-only lending with lower risk and greater transparency.
Ledn Redefines Its Strategy
Ledn, the Bitcoin-backed lending platform, has announced a major shift in its operations. Starting July 1, 2025, the company will no longer accept Ether (ETH) as collateral for loans. The move signals a full return to a Bitcoin-only model, aiming for increased simplicity, security, and alignment with its original mission.
Why the Change?
According to the platform's co-founders, more than 95% of users already preferred Bitcoin as collateral. The decision to drop ETH was made to eliminate unnecessary complexity and reduce counterparty risk. In parallel, Ledn will also stop lending client funds to institutional borrowers, a step meant to reinforce trust in the platform.
What This Means for Users
Users who currently have ETH-backed loans must repay or transition their collateral before the deadline. Going forward, all loan services will be denominated and collateralized in Bitcoin (BTC). This approach offers more predictability and aligns better with Ledn’s core clientele, many of whom are long-term Bitcoin holders.
Updated Loan Features
- Interest rate on custodial Bitcoin loans reduced to 12.9% APR
- Improved flexibility to withdraw BTC when the loan-to-value ratio allows
- No more rehypothecation of client assets
Market Implications
This move may foreshadow a broader trend among crypto lenders seeking to streamline operations and reduce exposure to altcoin volatility. It also appeals to Bitcoin maximalists and those advocating for transparency in crypto finance.
FAQs About the Ledn Update
Why is Ledn removing ETH?
The company wants to simplify its model and respond to user demand, as most prefer BTC for lending and borrowing.
What happens to my ETH-backed loan?
You must close or transition it by July 1, 2025, or risk liquidation.
Is Ledn becoming Bitcoin-only?
Yes. Going forward, only BTC will be accepted as collateral for loans.
Will interest rates change?
Yes. The APR for custodial loans has been lowered to 12.9% to make them more attractive.
Can I earn yield on BTC deposits?
No. Yield products are being phased out to avoid institutional risk and asset rehypothecation.
How is this different from other platforms?
While others diversify into altcoins and DeFi products, Ledn is focusing exclusively on Bitcoin and risk minimization.
Will Ledn offer ETH services in the future?
There are no plans to reintroduce ETH or other altcoin services for the foreseeable future.
Is this good for the crypto lending ecosystem?
It depends. Some see it as a step toward safer practices; others worry it limits flexibility.
What alternatives are there for ETH lending?
How can I prepare for the change?
Review your open loans on Ledn, consider repaying or refinancing in BTC before the cutoff date.
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