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Ledn Founder Reveals How Bitcoin-Backed Loans Are Pioneering Financial Solutions 

Last Updated May 16, 2024 10:59 AM
Andrew Kamsky
Last Updated May 16, 2024 10:59 AM

CCN writer Andrew Kamsky interviewed Mauricio di Bartolomeo to understand more about Ledn’s Bitcoin-Backed loans.

Mauricio Di Bartolomeo is the founder and Chief Strategy Officer of Ledn, which aims to bridge traditional finance and Bitcoin wealth management, fostering financial innovation for crypto holders.

Bitcoin Backed Loans Are “Solving Our Own Problem Which Led To The Creation Of Ledn,” Shares Mauricio di Bartolomeo

Di Bartolomeo began by addressing the start of Ledn, born out of a personal need to manage Bitcoin wealth. Mauricio explains that “we built Ledn  to solve our own problem,” he states, recounting his early days of Bitcoin mining in Venezuela’s hyperinflationary environment. 

This personal challenge led to the innovation of the innovation behind Bitcoin-backed loans, used as a financial instrument, allowing users to retain ownership of Bitcoin while accessing liquidity.

From Personal Need To Industry Innovation: The Genesis of Bitcoin-Backed Loans At Ledn

The inception of Bitcoin-backed loans at Ledn was driven by a personal need of his, “So we wanted somebody to lend us dollars and keep the Bitcoin so that we could still be owners of the Bitcoin,” di Bartolomeo shares. 

This personal challenge led to the creation of a service that addresses a widespread need among Bitcoin miners and holders alike.

The Process And Terms Of A Ledn Bitcoin Backed Loan

Di Bartolomeo details the process of obtaining a Bitcoin-backed loan with Ledn, emphasizing the flexibility and fairness of the terms. “You put one thousand dollars in Bitcoin as collateral. We will send you the 500 euros to your bank account. The loan can remain open for as long as you want. It’s a one-year term, but it rolls automatically if you don’t repay after one year,” he states. 

This flexibility ensures that borrowers can manage loans according to specific personal financial situations.

Ledn Interest Rates And Risk Management Is “Incredibly Conservative And Some Would Even Call Us Boring” Asserts Mauricio

When asked about the interest rates charged by Ledn for a Bitcoin-backed loan, Mauricio explained that they are set by the market, ensuring competitiveness and transparency. Di Bartolomeo explains, “The dollars that we lend to you, someone else lends to us. The difference between 12% to 15%, between 8% and 10% is Ledn’s margins.” This approach not only keeps Ledn’s operations sustainable but also aligns with the company’s commitment to providing fair and transparent financial services.

Highlighting the importance of risk management, di Bartolomeo points out, “Ledn is very much, in Bitcoin terms or in crypto terms, incredibly conservative and some would even call us boring. When it comes to finance, I think that’s how money should be.” This conservative approach to risk, especially in the volatile industry of cryptocurrency, is a pillar of Ledn’s operational philosophy.

By prioritizing security and stability over high-risk ventures, Ledn aims to provide a safe, reliable platform for its clients.

Comparison: Ledn’s Approach In Contrast To Failed Companies Such As Celsius

The conversation around custody and security naturally led to a comparison with Celsius, a company that faced bankruptcy in 2022, due to its risky financial practices. Di Bartolomeo discusses Celsius’s downfall, attributing it to reckless risk management of client assets. 

“Celsius is a great example because they took on an immense amount of risk and they didn’t tell their clients about this risk,” he states. This lack of transparency and the misalignment of asset management strategies with client expectations were key factors in Celsius’s failure.

In stark contrast to how Celcius operates, Ledn prioritizes transparency and client assurance. Di Bartolomeo emphasizes the measures Ledn takes to ensure clients are well-informed and confident in the security of client assets. 

“We bring an accountant to Ledn every six months to look at our books, look at the balances we owe our clients… That happens every six months. Our clients can see the report,” he explains. This level of transparency is part of Ledn’s commitment to building trust and demonstrating Ledn dedication to responsible asset management.

Mauricio On Ledn Custody: ‘We Are A Custodial Service’ Ensuring Security And Trust”

Di Bartolomeo explains, “We are a custodial service. So you would have to give us the Bitcoin, and we will control the keys to the Bitcoin during the time that your loan is open.” 

This direct control over the digital assets ensures that Ledn can securely manage the collateral backing clients’ loans. Unlike non-custodial services, where clients retain control over client keys and thus their own assets, Ledn’s custodial approach allows for a structured and secure management system, considered important for the integrity of a Ledn loan product.

Mauricio di Bartolomeo On The Global Impact Of Bitcoin Financial Services

Exploring the global applicability of Bitcoin as collateral, di Bartolomeo highlights the universal nature of Ledn’s services. “Bitcoin is the first asset in financial history that someone in Canada or Portugal can place as collateral, and someone from Colombia can do the same,” he explains. 

This global pooling underpins Ledn’s mission to offer fair financial services across borders, democratizing access to liquidity for Bitcoin holders worldwide.

The Future of Bitcoin Financial Services:  “Ledn Will Be To Bitcoin What A Bank Is To FIAT” According to Mauricio di Bartolomeo

Looking ahead, di Bartolomeo envisions Ledn as a one pioneering the Bitcoin financial services, akin to what traditional banks are to FIAT currency today. “Ledn will be to Bitcoin what a bank is to fiat,” he declares, outlining a future where Bitcoin wealth can be integrated into real-world financial scenarios. 

Ledn’s vision includes expanding services to encompass Ethereum-backed loans, further broadening Ledn’s offerings to meet the diverse needs of the cryptocurrency community.

Mauricio di Bartolomeo’s Reflections On Sustainability And Innovation

In his concluding thoughts, di Bartolomeo reflects on the importance of building a sustainable and innovative platform that stands the test of time. Drawing from his personal journey and the collective experience of Ledn’s team, he emphasizes the company’s commitment to integrity, sustainability, and the responsible management of digital assets. 

“We’re not going to screw this up,” he affirms, signaling Ledn’s dedication to contributing positively to the cryptocurrency ecosystem.

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