Original title: Ledn Eyes California Expansion as TradFi Prepares to 'Deploy Big Dollars at Scale': CEO
Original author: André Beganski
Original source:
Compiler: Daisy, Mars Finance
Ledn plans to enter the California market, traditional financial giants prepare for "large-scale deployment of funds"
The CEO revealed that the centralized crypto lending platform currently manages $1.5 billion in assets.
At a time when Wall Street rivals are pouring into the crypto space, Ledn, a crypto lending platform with a presence in more than 130 countries, is looking to expand in the U.S. and target regulatory approvals on the West Coast.
"We have just submitted an application to the State of California," Adam Reeds, co-founder and CEO of Ledn, said in an interview with Decrypt, "As the price of Bitcoin rises, the number of people holding Bitcoin increases, which will justify the compliance costs of doing business in new regions." ”
Founded in 2018, Ledn is one of the largest centralized crypto lenders to survive a series of industry crashes in 2022, according to Galaxy Digital. Galaxy noted that at the end of last year, Ledn, stablecoin issuer Tether and it together accounted for 90% of the total outstanding loans of $11.2 billion.
This figure is still well below the peak of $34.8 billion in 2022 (which was then driven by the now-bankrupt likes of BlockFi and Genesis), but Reeds believes the market could be on the verge of a massive shift as financial giants like Cantor Fitzgerald form Bitcoin funding units.
Business model and competitive landscape
Reeds said that 90% of the company's business involves providing dollar loans to individuals who are reluctant to sell Bitcoin, with minimum loan amounts of up to $500. He said institutions such as Cantor would open up more sources of financing and reduce Ledn's cost of capital, thereby helping the company "serve individuals at a better cost".
"As institutions move in, their most immediate opportunity is to deploy money on a massive scale," he adds, "and it's no longer a daunting pioneering behavior, it's going to become a FOMO (fear of missing out) problem in the boardroom — Cantor's competitors will ask, 'Why don't we do this?'" ’”
Changes in the regulatory environment
Ahead of US President Donald Trump's re-election, headwinders are likely to include former SEC chairman and crypto skeptic Gary Gensler. Critics argue that the SEC's focus on enforcement actions during Gensler's tenure stifled innovation and deterred traditional financial institutions.
Despite Gensler's departure and regulatory friendliness, Ledn still faces fragmented regulation of state lending licenses in the United States. The company currently operates in 39 states, with California and Tennessee having the highest population coverage.
Global market impact
Reeds believes Ledn will eventually be licensed in all 50 states, but the majority of the platform's $1.5 billion in assets are linked to countries in the Global South. In the past year, the total assets of the platform have increased by 140%.
He explained that Ledn is popular in countries with weak property rights systems because users have fair access to financing opportunities when assets such as land are difficult to mortgage. "In most countries, loans are the prerogative of the rich. We are now finally able to eliminate the injustices caused by different places of origin. ”
Zack Pokorny, an analyst at Galaxy Research, pointed out that the emergence of institutions such as Cantor is an important positive. He told Decrypt that more competition should lead to lower fees, and increased liquidity would make lending cheaper. "This will drive down costs and accelerate scale-up. Our operating costs have generally decreased, while capital costs may also be reduced. ”
Industry reputation competes with DeFi
Centralized crypto lenders are still alive in the shadows of 2022, but the entire space has become more transparent as users turn to decentralized finance (DeFi, which currently accounts for 60% of total crypto lending), Pokorny said.
Using DeFi lending protocol Aave as an example, Pokorny points out that (encapsulated) Bitcoin is becoming a more common form of collateral, which aligns with Ledn's core business. "It's very popular. Bitcoin is now likely to be the largest on-chain collateral asset for Aave on Ethereum, which in turn is the largest on-chain lending market. ”
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At a time when DeFi is devouring 60% of the share: Can centralized lending platforms hold the last moat by relying on "compliance cost differences"?
Original title: Ledn Eyes California Expansion as TradFi Prepares to 'Deploy Big Dollars at Scale': CEO
Original author: André Beganski
Original source:
Compiler: Daisy, Mars Finance
Ledn plans to enter the California market, traditional financial giants prepare for "large-scale deployment of funds"
The CEO revealed that the centralized crypto lending platform currently manages $1.5 billion in assets.
At a time when Wall Street rivals are pouring into the crypto space, Ledn, a crypto lending platform with a presence in more than 130 countries, is looking to expand in the U.S. and target regulatory approvals on the West Coast.
"We have just submitted an application to the State of California," Adam Reeds, co-founder and CEO of Ledn, said in an interview with Decrypt, "As the price of Bitcoin rises, the number of people holding Bitcoin increases, which will justify the compliance costs of doing business in new regions." ”
Founded in 2018, Ledn is one of the largest centralized crypto lenders to survive a series of industry crashes in 2022, according to Galaxy Digital. Galaxy noted that at the end of last year, Ledn, stablecoin issuer Tether and it together accounted for 90% of the total outstanding loans of $11.2 billion.
This figure is still well below the peak of $34.8 billion in 2022 (which was then driven by the now-bankrupt likes of BlockFi and Genesis), but Reeds believes the market could be on the verge of a massive shift as financial giants like Cantor Fitzgerald form Bitcoin funding units.
Business model and competitive landscape
Reeds said that 90% of the company's business involves providing dollar loans to individuals who are reluctant to sell Bitcoin, with minimum loan amounts of up to $500. He said institutions such as Cantor would open up more sources of financing and reduce Ledn's cost of capital, thereby helping the company "serve individuals at a better cost".
"As institutions move in, their most immediate opportunity is to deploy money on a massive scale," he adds, "and it's no longer a daunting pioneering behavior, it's going to become a FOMO (fear of missing out) problem in the boardroom — Cantor's competitors will ask, 'Why don't we do this?'" ’”
Changes in the regulatory environment
Ahead of US President Donald Trump's re-election, headwinders are likely to include former SEC chairman and crypto skeptic Gary Gensler. Critics argue that the SEC's focus on enforcement actions during Gensler's tenure stifled innovation and deterred traditional financial institutions.
Despite Gensler's departure and regulatory friendliness, Ledn still faces fragmented regulation of state lending licenses in the United States. The company currently operates in 39 states, with California and Tennessee having the highest population coverage.
Global market impact
Reeds believes Ledn will eventually be licensed in all 50 states, but the majority of the platform's $1.5 billion in assets are linked to countries in the Global South. In the past year, the total assets of the platform have increased by 140%.
He explained that Ledn is popular in countries with weak property rights systems because users have fair access to financing opportunities when assets such as land are difficult to mortgage. "In most countries, loans are the prerogative of the rich. We are now finally able to eliminate the injustices caused by different places of origin. ”
Zack Pokorny, an analyst at Galaxy Research, pointed out that the emergence of institutions such as Cantor is an important positive. He told Decrypt that more competition should lead to lower fees, and increased liquidity would make lending cheaper. "This will drive down costs and accelerate scale-up. Our operating costs have generally decreased, while capital costs may also be reduced. ”
Industry reputation competes with DeFi
Centralized crypto lenders are still alive in the shadows of 2022, but the entire space has become more transparent as users turn to decentralized finance (DeFi, which currently accounts for 60% of total crypto lending), Pokorny said.
Using DeFi lending protocol Aave as an example, Pokorny points out that (encapsulated) Bitcoin is becoming a more common form of collateral, which aligns with Ledn's core business. "It's very popular. Bitcoin is now likely to be the largest on-chain collateral asset for Aave on Ethereum, which in turn is the largest on-chain lending market. ”