Ledn Launches Support For ETH Staking Yields
Ledn to segregate staking accounts from its lending operations
By: Samuel Haig •DeFi News
The Cayman-based crypto lender, Ledn, will launch accounts offering exposure to Ethereum staking from Oct. 12.
Customers can stake via Ledn by transferring ETH to its Growth Account product, with the platform offering annual percentage yields (APYs) of up to 2%. Growth Accounts are not subject to the delays associated with manual staking or unstaking Ether.
“Users have been continuously asking us to add Ether,” said Ledn co-founder, Mauricio Di Bartolomeo. “Looking forward, we’re working towards rolling out ETH support across the entire Ledn suite of products in the coming months.”
Ledn will also launch Growth Accounts offering APYs of up to 8.5% on Tether, the leading stablecoin by market cap. However, the products will not be available to residents of Canada or the United States at launch. Ledn already offers Growth Accounts for BTC and USDC.
Growth Accounts are subject to a “ring-fencing” mechanism that “shields clients from the risks associated with other company offerings.” Ledn hopes the system will overcome the widespread skepticism of centralized platforms held by many web3 users following failures of large CeFi amid last year’s market downturn.
“[Ring-fencing] 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,” the company said.
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.
More than 21.5% of circulating Ether has been locked up for staking in 12 months following Ethereum’s transition to Proof of Stake, according to Staking Rewards. A recent paper authored by prominent researchers Tim Beiko and Dapplion estimated that 50% of Ether’s supply could be staked within 12 months.
“We want to slow it down a bit to buy us some time,” said Matt Nelson, product manager at Ethereum software developer, Consensys.
Dapplion tweeted that “the safety of Ethereum” could be at stake if too much of ETH’s supply is locked up for staking. For example, the excessive dominance of Ethereum’s staking layer could undermine Ethereum’s on-chain liquidity, or impact its availability to pay for transaction fees.
CORRECTED ON 9/28 @ 10AM EST to reflect Ledn's hq is Cayman Islands.