Cayman-based crypto lender Ledn launches staking accounts

Cayman-based crypto lender Ledn launches staking accounts

Its lending operations have been segregated into a number of staking accounts.

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

Users can invest in Ledn through transfer of ETH to its growth account, offering annual percent yields of up to 2%. No delays are associated with manual staking or unstaking Ether.

Ledn also launched growth accounts that offer APYs of up to 8.5% on Tether, the world's leading stablecoin by market cap. The new products will not be available to Canadians or the United States at launch, the company said in a statement. Ledn offers growth accounts for BTC andUSDC.

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

The company said it ensures that 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 seeking 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.

A further 21.5% of circulating Ether has been locked up in 12 months after Ethereum's transition to Proof of Stake, according to Staking Rewards. A recent paper, authored by prominent researchers Tim Beiko and Dapplion, calculated that 50% of Ether's supply could be staked within 12 months.

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