Company Name: January
Founders: Mauricio Di Bartolomeo and Adam Reeds
Establishment date: September 2018
Headquarters location: Not available (quite remote)
Number of employees: 51
Website: https://ledn.io/
Public or private? private
“Lending is the type of relationship where you value return to Your assets more than return on “Your assets.”
This was Di Bartolomeo’s answer when I asked him what happened Januarya platform for borrowing and lending bitcoin and cryptocurrencies, sets itself apart from its competitors, including defunct companies offering similar services such as BlockFi, Celsius, and Voyager.
“There is no company in this space that has a better track record of returning your assets than Ledn,” Di Bartolomeo told Bitcoin Magazine.
Since its founding, Ledn has prioritized security and reliability. Di Bartolomeo and his co-founder, Adam Reeds, wanted to gain the trust of not only the traditional financial institutions that Ledn works with, but also the trust of Ledn’s global user base, some of whom are accessing financial services for the first time thanks to a company.
Di Bartolomeo’s work is entirely personal to him, in part because he understands the importance of Bitcoin thanks to his first-hand experience with it in his native Venezuela.
Di Bartolomeo’s Bitcoin Journey
“My family found and started mining Bitcoin in Venezuela in late 2014 and early 2015 in the middle of hyperinflation where it was illegal for them to buy or hold US dollars or anything that would maintain value,” Di Bartolomeo said.
“When I saw how they and other Venezuelans were using Bitcoin to opt out of their broken system, I thought to myself ‘How many people in the world live this way and how many people in the world would need this?’” He added: “And my answer was a number I couldn’t calculate in my mind.” “.
Di Bartolomeo decided to start working in Bitcoin soon after. He moved to Canada where he and Reeds began helping miners grow their operations. Di Bartolomeo noted that miners wanted to expand but did not want to sell their bitcoin to do so.
“They had bitcoin revenues and paper expenses, and there was no real place for them to get any kind of financing,” Di Bartolomeo said.
“We sought financing, but no one refused to give us a loan. So we decided to solve our problem ourselves.”
“That was the genesis of Leyden.”
How Leiden distinguished itself
When Ledn was founded in 2018, there were only a few other services like it. However, there was a noticeable difference between Ledn and its competitors.
“There were other bitcoin-backed lenders in the market, but they needed tokens,” Di Bartolomeo said.
“It was around the ICO period and we saw Nexo and Celsius coming into the space with tokens. “My opinion is that they were just using them to raise money without selling shares,” he added.
Di Bartolomeo and Reds did not want to issue a token, as they saw it as a questionable practice from a regulatory perspective.
“When you look at finance on a large scale, you immediately think about compliance and regulation,” Di Bartolomeo said. “We wanted to build a company that would be able to sit in front of BlackRock or Goldman Sachs, the highly regulated banks, and say: Hey, I want to interact with you guys.”
Furthermore, Leiden prioritized transparency. In 2021, it became one of the first major Bitcoin companies to release Proof of Reserves, a system that allows anyone to audit Ledn’s Bitcoin holdings.
“We are still the only lender operating in the US or other highly regulated markets that has this proof of reserves where our clients can come every six months and check it,” Di Bartolomeo said. “We’ve been doing this since it was cool.”
Ledn also publishes a monthly magazine Open book report Which breaks down Ledn’s lending strategies.
From early on, Di Bartolomeo believed that a disciplined and transparent approach would foster trust among Bitcoin enthusiasts, a group that lives by “Don’t trust, checkSpell, his thesis was finished.
Risk reduction
Subordinate Many products offered by LednThe first is generating yield on Bitcoin – the same type of product that caused BlockFi’s demise.
However, Ledn is approaching its version of this product differently than its previous competitor did.
“We generate BTC returns primarily by lending it to market makers who arbitrage the BlockRock IBIT ETF and Coinbase spot units,” Di Bartolomeo said.
“These groups are price neutral. They do not have directional exposure. They are just filling price gaps and taking advantage of volatility,” he added.
BlockFi’s approach was much riskier.
“With BlockFi, there was a duration mismatch,” Di Bartolomeo explained.
“They were taking open-term deposits, and they were deploying them into mining infrastructure that were payable for five years. What do you think will happen when someone shows up before the five years are up?” he added, referring to the idea that what happened to BlockFi seems inevitable.
Furthermore, Ledn only deals with highly liquid assets like Bitcoin (and Ether, which they added in 2023), which helps mitigate the risk of asset liability mismatches.
“With bitcoin, you always have people on both sides of the house who have demand,” Di Bartolomeo said.
“When you start backing things like the Shiba Inu or Dogecoin and people want to earn interest on them, you then have to convert Dogecoin into something else, and you create a mismatch between asset liabilities in the process,” he added.
Di Bartolomeo also noted that all of Ledn’s products are walled off from each other.
“When you pay for a custodial loan, you don’t have 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 now-discontinued peers.”
Increasing competition
As more people begin to view Bitcoin as a “native security,” more Bitcoin borrowing and lending platforms are expected to emerge. He’s done a lot already.
Centralized bitcoin borrowing and lending services like Salt and Nexo remain competitors to Ledn, while institutional bitcoin financing services like Newmarket Capital’s Battery Finance are also poised to cut into Ledn’s business. and services that enable users to borrow against their Bitcoin in a non-custodial manner, including Debbie And Lava, may also increase its market share.
Di Bartolomeo is aware of the competition but does not appear concerned. In fact, he believes that in such a market, the consumer will be the biggest winner, and he has no plans to change Leiden’s strategy. Instead, he’s looking to double down on what Leiden does best.
“Our sweet spot will be individuals or people who prioritize transparency, security of funds and compliance,” Di Bartolomeo said.
“Safety, trust and transparency are what makes Leiden stand out. There is no other operator like us in the industry with a similar track record in terms of loan processing, years of operation and cycles,” he added.
“This industry is fickle. You have to have the right experience and the right set of values behind your team, and I think other companies will be hard-pressed to prove what we have over the time that we have. Would you be able to find something cheaper? Yes. Would that be more risky?” definitely.”
Promoting financial inclusion
One of the primary ways Ledn differs from traditional borrowing and lending platforms is that its rates do not vary based on the jurisdiction in which the lender or borrower is located.
“It makes people feel empowered because they know that whether they are in Madrid or Medellin, they get the same rate,” Di Bartolomeo said.
Di Bartolomeo smiled from ear to ear as he discussed this point, as it seemed to remind him of why he got involved with Bitcoin in the first place.
“This is one of the things that makes me proud of this work,” he added.
“We have people in Latin America coming to us saying we are the first loan they have ever been approved for. That’s because all we look at is ‘Have you completed the KYC process?’; ‘Are you an obedient 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 that aspect of Bitcoin and what we do.”
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