Company Name: Jan
Founders: Mauricio Di Bartolomeo and Adam Reeds
Founding date: September 2018
Headquarters Location: N/A (Fully remote)
Number of employees: 51
Website: https://ledn.io/
Public or Private? Private
“The loan is the type of relationship in which performance is valued of your assets more than performance in their assets.”
This was Di Bartolomeo's response when I asked him what he had marked Jana bitcoin and cryptocurrency lending and lending platform, in addition to its competitors, including now-defunct companies that offered similar services such as BlockFi, Celsius, and Voyager.
“There is no company in this space that has a better track record of returning assets than Ledn,” Di Bartolomeo told bitcoin Magazine.
Since its founding, Ledn has prioritized safety and reliability. Di Bartolomeo and his co-founder, Adam Reeds, have not only sought to gain the trust of the traditional financial institutions with which Ledn interacts, but also that of Ledn's global user base, some of whom are accessing financial services for the first time. thanks to the company.
And Di Bartolomeo's work is quite personal to him in part because he understands the importance of bitcoin thanks to his first-hand experience with it in his home country of Venezuela.
Di Bartolomeo's bitcoin Journey
“My family found bitcoin and started mining it in Venezuela in late 2014/early 2015, in the middle of hyperinflation, where it was basically illegal to buy or hold US dollars or anything that preserved value,” Di Bartolomeo recounted.
“When I saw how they and other Venezuelans were using bitcoin to opt out of their broken system, I thought, “How many people in the world live like this and how many people in the world are going to need this?” And my answer was a number that I couldn't calculate mentally,” he added.
Di Bartolomeo decided to start working in the bitcoin space shortly after. He moved to Canada, where he and Reeds began helping miners grow their operations. Di Bartolomeo recalled that these miners wanted to expand but did not want to sell their bitcoins to do so.
“They had bitcoin income and fiat expenses, and there was no real place for them to get any kind of financing,” Di Bartolomeo said.
“We looked for financing, but no one wanted to give us a loan. So we decided to solve our own problem,” he added.
“That was the genesis of Ledn.”
How Ledn differs
When Ledn was founded in 2018, only a few other services like this existed. However, there was a notable difference between Ledn and its competitors.
“There were other bitcoin-backed lenders on the market, but they needed tokens,” Di Bartolomeo said.
“This was in the era of ICOs and we saw Nexo and Celsius enter the space with tokens. “My opinion was that they were just using them to raise cash without selling equity,” he added.
Di Bartolomeo and Reeds did not want to issue any tokens because they considered it a questionable practice from a regulatory point of view.
“When you look at finance at scale, you immediately think about compliance and regulation,” Di Bartolomeo said. “We wanted to build a company that could sit in front of BlackRock or Goldman Sachs, heavily regulated banks, and say, 'Hey, I want to interact with you.'”
In addition, Ledn also prioritized transparency. In 2021, it became one of the first major bitcoin companies to issue proof of reserves, a system that allows anyone to audit Ledn's bitcoin holdings.
“We remain the only lender operating in the US or other highly regulated markets that has this proof of reserves where every six months our clients can come and check it,” Di Bartolomeo said. “We've been doing this since before it was cool.”
Ledn also publishes monthly open book report which breaks down Ledn's credit strategies.
From the beginning, Di Bartolomeo believed that taking a strict and transparent approach would foster trust among bitcoin enthusiasts, a group that lives by the “don't trust, verify”mantra, and his thesis has been fulfilled.
Reduce risks
Of the many products offered by Lednone is generating yield in bitcoin, the same type of product that caused the demise of BlockFi.
However, Ledn approaches its version of this product differently than its former competitor.
“We generate bitcoin yield on bitcoin primarily by lending it to market makers that arbitrage the BlockRock IBIT ETF and Coinbase spot units,” Di Bartolomeo said.
“These groups are price neutral. They have no directional exposure. “They are simply closing price gaps and benefiting from volatility,” he added.
BlockFi's approach was much riskier.
“With BlockFi, there was a duration mismatch,” Di Bartolomeo explained.
“They were accepting open-term deposits and deploying them into mining infrastructure that had a five-year return on investment. What do you think will happen when someone shows up before the five years are up? he added, alluding to the idea that what happened to BlockFi seemed inevitable.
What's more, Ledn only trades highly liquid assets like bitcoin (and ether, which they added in 2023), which helps alleviate the risk of asset-liability mismatch.
“With bitcoin, there are always people on both sides of the house with demand,” Di Bartolomeo said.
“When you start backing things like Shiba Inu or Dogecoin and people want to earn interest on them, then you have to convert that Dogecoin into something else, and you create an asset-liability mismatch in the process,” he added.
Di Bartolomeo also noted that all Ledn products are separate from each other.
“When you repay a custodial loan, you are not exposed to the credit risk of our other products,” he said. “This is very similar to how traditional finance works, and it's something we do very differently compared to our now-defunct peers.”
Growing competition
As more people begin to view bitcoin as “pristine collateral,” more bitcoin borrowing and borrowing platforms are bound to appear. Many have already done it.
Centralized bitcoin lending and borrowing services like Salt and Nexo remain competitors to Ledn, while institutional bitcoin financing services like Newmarket Capital's Battery Finance are also set to impact Ledn's business. And services that allow users to borrow against their bitcoins on a non-custodial basis, including Debbie and Lava, can also increase their market share.
Di Bartolomeo is aware of the competition but does not seem worried. In fact, he believes that in such a market, the biggest winner will be the consumer and he has no plans to change Ledn's strategy. Instead, he seeks to duplicate what Ledn does best.
“Our sweet spot will be individuals or people who prioritize transparency, security of funds and compliance,” Di Bartolomeo said.
“Security, trust and transparency are what distinguishes Ledn. “There is no other operator like us in this space with an equivalent track record in terms of loans processed, years in business and cycles survived,” he added.
“This industry is volatile. You need to have the right experience and the right set of values that drive your team, and I think other companies would find it difficult to demonstrate what we have in the time that we have. Can you find something cheaper? Yes. Will that be more risky? Absolutely.”
Promoting financial inclusion
One of the main differences between Ledn and traditional lending and borrowing platforms is that their rates do not differ depending on the jurisdiction in which the lender or borrower is located.
“This makes people feel very empowered because they know that whether they are in Madrid or Medellín, they will get the same rate,” Di Bartolomeo said.
And Di Bartolomeo smiled from ear to ear while arguing this point, as it seemed to remind him of why he got involved with bitcoin in the first place.
“This is one of the things I'm most proud of about this business,” he said.
“We have people in Latin America who have come to us to tell us that we are the first loan we have approved for them. This is because all we look at is “Did you complete KYC?”; 'Are you a submissive citizen?'; 'Do you have bitcoin?'” he added.
“It's not about 'Where do you live?'; 'Who are your parents?'; What is your skin color? “I love this aspect of bitcoin and what we do.”
