Why are companies like LEDN charger over 10% to borrow? Your LTV is only 50% and collaterized with Bitcoin. They can't lose money and yet they charge you an arm and a leg to use them. Parasites.
Login to reply
Replies (3)
It's not up to them. As I understand, LEDN is simply a bridge between lenders and borrowers. The lenders are the ones who set the interest rates. Strike is the same. They charge 13% and as low as 10.5% if you barrow 5.5 million. Itβs all dictated by the market.
Well thatβs stupid.
They are literally paying banks interest on money they can print out of thin air, and then charging Bitcoiners on top of that to βserviceβ the loan.
Might as well go to the bank yourself, defeats the whole purpose of using βBitcoin backed loansβ
I understand your point, but I think there's a key aspect you're overlooking. The value proposition of companies like LEDN isn't just about offering loans; it's about providing access to credit for individuals who might not qualify for traditional loans due to discrimination, credit score, etc. They cater to a niche where banks often fall short. Also, even people who have good credit may choose to use LEDN for idealistic reasons as a way to exit these broken legacy financial systems.