Cayman-based crypto lender Ledn launches staking accounts

Cayman-based crypto lender Ledn launches staking accounts

Besides a dedicated lending operation, Ledn has segregated staking accounts from its lending operations.

Ledn, a Cayman-based crypto lender, is launching accounts offering exposure to Ethereum staking from Oct. 12 onwards.

With Ledn's growth account product, customers can stake through Ledn by transferring ETH to its growth account, with the platform offering annual percentage yields of up to 2%. As a result, growth accounts are not subject to mechanical staking or unstaking Ether delays.

Ledn also will launch growth accounts, providing APYs of up to 8.5%, on Tether, the leading stablecoin by market cap. The new gadgets will not be available to Canadians or the United States at launch, but will be available for those who live in the U.S. or Canada. With BTC andUSDC being examples, Ledn offers growth accounts for BTC andUSDC.

'The ring-fencing' feature of growth accounts protects clients from the risks associated with other company offerings. Ledn hopes the system will overcome the widespread skepticism of centralized platforms held by numerous web3 users following failures of large CeFi amid last year's market downturn.

The company ensures that client clients are only exposed to the counterparties that generate their yield, and their assets will not be affected even in the unlikely event of Ledn's bankruptcy.

While centralized players like Ledn are trying to streamline the onboarding process for users seeking exposure to staking yields, Ethereum developers recently agreed to introduce measures to slow the rate new stakers can come online as part of Ethereum's next upgrade.

In 12 months, more than 21.5% of circulating Ethereum has been locked up for staking, according to Staking Rewards. A recently published paper authored by prominent researchers Tim Beiko and Dapplion estimated that 50% of Ether's supply could be staked within 12 months.

The safety of Ethereum could be at stake if too much of the ETH's supply is locked up for staking. The excessive reliance of Ethereum's staking layer could weaken Ethereum's on-chain liquidity, or affect its ability to pay for transaction fees.