Best Crypto Lending Platforms for BTC in 2025 – A Beginner’s Guide
Curious about earning interest on your Bitcoin or getting a loan without selling your BTC? This beginner-friendly guide compares the top crypto lending platforms in 2025 – from DeFi protocols like Aave and Morpho to CeFi services like Nexo and Ledn. We’ll break down their interest rates, fees, collateral requirements, security, and ease of use. Read on to discover which Bitcoin lending platform best fits your needs.
Crypto lending platforms let you earn interest by lending out your BTC or borrow cash/stablecoins by using your BTC as collateral . In practice, this means you can put your Bitcoin to work without selling it, which is great for long-term holders. For example, you might deposit BTC and earn an annual percentage yield (APY) paid in crypto, or lock up your BTC and get a stablecoin loan to spend – all while your Bitcoin remains yours.
There are two main types of crypto lending services: decentralized (DeFi) protocols and centralized (CeFi) platforms. DeFi lending platforms, such as Aave, Compound, and Morpho, operate on smart contracts with no central custodian. They offer transparency and self-custody, but using them requires some technical know-how (e.g., crypto wallets) and yields are purely market-driven. CeFi lenders like Nexo or Ledn are companies that hold your BTC and provide a web or app interface to earn interest or take loans. They tend to be more user-friendly for beginners and may offer fixed promotional rates, but you must trust the company to safeguard your assets – a lesson learned after some CeFi lenders (e.g. Celsius, BlockFi) collapsed in 2022 due to mismanagement of funds.
In this guide, we’ll compare the best BTC lending platforms of 2025 side by side. We focus on the most reputable DeFi protocols (Aave, Morpho, Compound, etc.) and CeFi services (like Nexo, Ledn, Unchained Capital). For each, we’ll look at typical BTC interest rates (APRs), fees, how much you can borrow against your Bitcoin (loan-to-value ratios), platform security, and ease of use. A summary comparison table is provided, and we also highlight recent trends (such as new platforms and post-2022 changes) that impact crypto lending in 2025. Let’s dive in!
1) Aave – Decentralized Lending Cornerstone
Aave is one of the largest and most established DeFi lending protocols, often seen as a cornerstone of the DeFi ecosystem. It launched in 2017 (originally as ETHLend) and now spans multiple networks (Ethereum, Polygon, Arbitrum, etc.), with a total value locked (TVL) around $40+ billion as of mid-2025. On Aave, you can deposit tokenized BTC (WBTC) to earn interest or use it as collateral to borrow other assets. The platform supports a wide array of coins and even introduced its own stablecoin GHO in 2023.
Interest rates (APY): Aave’s rates are variable, set by supply and demand in each liquidity pool. For Bitcoin, demand to borrow is relatively low, so the APY for lending WBTC is often near 0% (at times 0.01% or less on mainnet). In other words, don’t expect high yield on BTC just by depositing into Aave – the market has ample BTC liquidity and few borrowers. However, if you use BTC as collateral to borrow stablecoins, you’ll pay interest on the stablecoin loan; for example, borrowing USD stablecoins can cost around 4–6% APR in interest as of 2025 (stablecoin borrow rates tend to be higher than ETH/BTC due to high demand).
Collateral requirements: Aave loans are overcollateralized – you must post more BTC value than the loan. The max loan-to-value (LTV) for WBTC is about 70–80%. This means if you deposit $10,000 in WBTC, you could borrow up to ~$7,000 worth of another asset. The exact LTV depends on risk parameters; highly volatile assets have lower LTVs. WBTC’s LTV (~75% on Aave v3) reflects Bitcoin’s relative stability and liquidity. If your loan balance exceeds the liquidation threshold (a bit above the LTV, say ~80–85%), the protocol will liquidate your collateral with a penalty to repay the loan – so borrowers should maintain a buffer.
Fees: Aave does not charge explicit fees for lending or borrowing aside from the interest rate spread. There are no withdrawal fees or account fees at the protocol level. (Do note that using Aave on Ethereum mainnet entails gas fees for transactions, but on layer-2 networks these costs are much lower.) Aave’s revenue comes from a small cut of borrower interest (10–20%) that goes to its DAO treasury, but this doesn’t add extra cost beyond the quoted APR. Uniquely, Aave also offers flash loans (instant, no-collateral loans repaid in one transaction) for a 0.09% fee, mainly used by advanced users/arbitrage.
User interface & ease of use: The Aave app is a polished web dashboard where you connect a crypto wallet (e.g. MetaMask) to deposit or borrow. For beginners, Aave can be intimidating at first – you’re interacting with a DeFi smart contract and must understand concepts like wallet signing, collateral ratios, and variable interest. There is no customer support to call and no password reset (your crypto wallet is your login). That said, Aave’s interface is considered one of the more user-friendly in DeFi and provides health factor visuals, warnings, and toggles between stable/variable rates. New users might start on a testnet or with small amounts to get comfortable.
Decentralization & security: Aave is a fully decentralized protocol governed by AAVE token holders. It has a strong security track record – no major hacks to date – and has undergone numerous audits by firms like Trail of Bits and OpenZeppelin. Aave also has a Safety Module where AAVE tokens are staked as insurance against shortfalls. Overall, Aave is considered one of the safest venues to borrow or lend crypto due to its long history and robust design (it even withstood a large attempted economic attack in 2022).
Pros:
· Fully decentralized, non-custodial protocol (no need to trust a company)
· Massive liquidity and many supported assets (WBTC, ETH, stablecoins, etc.)
· Competitive interest rates for borrowers; often cheaper than CeFi loans
· Strong security (audited code, bug bounties, no major hacks)
· Innovative features like flash loans and an upcoming Aave v4 for efficiency
Cons:
· Lending yields on BTC are very low on Aave (~0% APY) due to low demand
· Not ideal for beginners unfamiliar with DeFi – requires using a crypto wallet and understanding collateral management
· Interest rates are variable; they can spike if utilization soars (introducing some uncertainty for long-term loans)
Morpho – Optimized DeFi Lending Aggregator
Morpho is a newer DeFi lending protocol (launched 2022) that sits on top of platforms like Aave and Compound to optimize interest rates. Think of Morpho as a smart layer that matches lenders directly with borrowers whenever possible, instead of everyone lending into a common pool. By doing so, Morpho can give lenders a higher yield (closer to what borrowers pay) and give borrowers a lower rate (closer to what lenders earn) – essentially narrowing the interest spread that typical protocols have. If no direct match is available, funds fall back to the underlying pool (so you always earn at least the base Aave/Compound rate, and more when matched).
Interest rates: Morpho improves APY for BTC and other assets relative to lending directly on Aave/Compound. For example, if Aave’s WBTC supply APY is 0.01% and borrow APY is 0.30%, a Morpho lender might earn something in between when matched (closer to 0.30%). The exact rate floats as matches occur, but Morpho effectively guarantees an equal or better rate than the underlying pool for suppliers. In practice, the yield on WBTC via Morpho is still modest (often under 1%), but every bit counts. Morpho charges no additional fees on interest – lenders receive all the interest from borrowers, and borrowers just pay the interest (no origination or admin fees). This zero-fee model is a big draw for cost-sensitive users.
Collateral & borrowing: When using Morpho, you still follow the collateral rules of the underlying protocol. Morpho currently supports over 70 assets (on Ethereum and Base networks) – if you deposit WBTC, you can borrow other assets similarly to Aave/Compound. The collateral factors are largely inherited: e.g. WBTC collateral might allow ~75% LTV, just as on Aave. Morpho’s documentation notes some assets allow up to 86% LTV before liquidation (likely for very low-volatility collateral like stablecoins or liquid staking tokens). For Bitcoin, expect standard ~70-75% LTV to manage volatility. Importantly, Morpho is non-custodial – you interact with it through a Web3 wallet and retain control of your funds, just like Aave.
Fees: Morpho has no platform fees for using the protocol. There are no deposit, withdrawal, or protocol fee cuts. It’s designed to be a lean infrastructure. (The project may introduce a token or fees in future for governance, but as of 2025 it does not take a cut.) You will still pay the Ethereum gas fees for transactions and of course the interest on any borrowed funds, but nothing on top. This makes Morpho potentially more profitable for lenders and cheaper for borrowers than many competitors.
Security: Even as a newer protocol, Morpho has placed heavy emphasis on security. It has undergone 25+ smart contract audits by reputable firms (OpenZeppelin, Trail of Bits, etc.) and has had no hacks or major incidents so far. Initially, there were some concerns about centralization in Morpho’s governance (control by the team), but the launch of the MORPHO token helped distribute governance power in 2023. Morpho is governed by MORPHO token holders now, aiming for a community-driven approach. Still, as a relatively young project, it doesn’t yet have the multi-year battle testing of Aave/Compound – but its innovative design and security-forward approach have quickly made it a top 3 DeFi lending protocol by TVL.
Ease of use: Morpho’s user interface is improving, but it may not be as immediately straightforward as Aave’s. Typically, users access Morpho via its web app or through integrated wallets. The concept of peer-to-peer matching is abstracted away – you simply deposit and borrow like normal, and Morpho handles the rest behind the scenes. For an average user, using Morpho feels similar to using Compound/Aave (in fact, you might not even notice the difference except a slightly higher APY). Morpho has introduced “vaults” to simplify managing positions across multiple markets – you deposit once into a vault and it optimizes yield across protocols. Overall, if you’re comfortable with Aave, you can handle Morpho. Beginners can use Morpho, but should first learn basics on Aave/Compound interfaces.
Pros:
· Higher yields for lenders compared to base DeFi pools (keeps your BTC working harder)
· Lower rates for borrowers, with zero additional fees – very borrower-friendly
· Non-custodial and decentralized (governed by MORPHO token community)
· Broad asset support (70+ assets) and multi-chain (Ethereum mainnet and Base)
· Strong security focus (25+ audits, no hacks so far)
Cons:
· Requires DeFi knowledge – similar complexity to using Aave (wallet, collateral management)
· Newer protocol with a shorter track record (less “battle-tested” than Aave/Compound)
· User interface is functional but could be less polished than more mature platforms
· Morpho’s benefits shine when markets are active; in low-demand scenarios (like BTC lending), the improvement over Aave might be modest if there are few borrowers to match
Compound – The Original DeFi Lending Protocol
Compound is another veteran DeFi lending platform, launching on Ethereum in 2018 and essentially kickstarting the liquidity mining craze in 2020 with its COMP token. Compound operates similarly to Aave: users supply assets to earn interest and borrow other assets against their collateral. It supports WBTC and other major assets across multiple chains (Ethereum, Polygon, Arbitrum, etc.), though its scale is smaller than Aave’s. As of 2025, Compound’s TVL is around $3.6 billion – respectable, but an order of magnitude below Aave.
Interest rates: Compound’s rates are also algorithmic. For WBTC, the supply APY is typically near 0% (often literally 0.0% on the dashboard) given the oversupply of BTC liquidity versus borrowing demand. Borrowing WBTC on Compound likewise has a low interest (someone might pay ~0.1–0.5% to borrow WBTC – usually only useful for arbitrage or shorting). Borrowing stablecoins on Compound tends to cost a few percent APR, similar to Aave, while supplying stablecoins yields a bit less. Compound used to augment yields with COMP token rewards, but by 2025 those distributions have tapered off significantly (no more outsized “liquidity mining” rates). So Compound’s APYs now are mostly organic and comparable to Aave’s. There are no extra fees for using Compound; like Aave, it takes a reserve fraction of interest for the DAO, but suppliers/borrowers just see the net APR.
Collateral & LTV: Compound governance (via COMP holders) sets collateral factors for each asset. Collateral factors can be as high as 90% for very low-volatility assets. In practice, WBTC’s collateral factor on Compound is around 70%, comparable to Aave. (Compound V3 introduced isolated markets with one borrowable asset to improve risk management, but for simplicity, its main multi-asset market still uses similar LTV logic to Aave.) Keep in mind if you use WBTC as collateral to borrow stablecoins on Compound, a ~20–30% drop in BTC’s price could trigger liquidation if you’re at max LTV. As always, it’s safer to borrow much less than the max.
Notable features: Compound is known for its simplicity. When you deposit assets, you receive cTokens (like cWBTC) representing your stake, which automatically accrue interest. These cTokens can be integrated into other DeFi apps. Unlike Aave, Compound historically kept a narrow focus – it doesn’t have flash loans or a native stablecoin (though Compound Labs launched a separate product “Compound Treasury” and a dollar-pegged Compound USD (cUSD) in some markets). Compound’s interface is minimalist and many users access it indirectly via other wallets and DeFi dashboards. This simplicity can be a pro for those who want “just lending, nothing fancy.”
Security & track record: Compound has been audited by top firms and has a mostly good security record. However, it did suffer a notable incident in 2021 where a bug in an upgrade caused ~$80 million in excess COMP rewards to be distributed erroneously. This wasn’t a hack per se, but an error in the protocol logic. The issue was resolved and Compound has had no major user fund losses from hacks. Governance is fully decentralized via the COMP token, though participation is limited to a relatively small community. Overall, Compound remains a trusted platform for crypto lending, even if its mindshare and liquidity have been somewhat overshadowed by Aave.
Ease of use: Compound is beginner-friendly in design – the app is straightforward, and there are fewer toggles and assets than Aave, which can simplify things. It also lacks some of Aave’s newer modes (like efficiency mode, which can confuse newcomers). Many crypto wallet apps (e.g. Coinbase Wallet, Argent) have Compound integrated, so users might be lending via Compound without even realizing it. For a newbie, the challenge of Compound is the same as any DeFi lending: using a Web3 wallet and grasping over-collateralization. But if one is new to DeFi, Compound’s clean interface is a gentle starting point to learn about lending.
Pros:
· A simple and clean interface – easy to supply/withdraw and see your balances
· Long track record in DeFi lending (pioneered the space, community governed since 2018)
· Widely integrated into other apps and services (cTokens are Lego pieces in DeFi)
· No platform fees; transparent interest rate model
· Audited and generally secure (only minor incidents, promptly addressed)
Cons:
· Very low yields for BTC lending (like other DeFi platforms) – often effectively 0%
· Limited innovation compared to peers (no unique features to boost yields or utility)
· Liquidity and asset selection slightly less than Aave’s (fewer exotic assets supported)
· Relies on the strength of COMP governance, which, while decentralized, has a small active voter base
· Still requires DeFi knowledge to use (self-custody wallet, risk of liquidation if borrowing)
Spark (MakerDAO) – BTC-to-Stablecoin Loans in Maker’s Ecosystem
Spark Lend is a lending dApp launched in 2023 as part of MakerDAO’s ecosystem (now rebranded as Sky Protocol). It’s essentially MakerDAO’s answer to Aave – in fact, Spark is built on Aave’s v3 code but tailored for Maker’s purposes. Spark focuses on stablecoin lending/borrowing, especially around DAI (or rather the new upgraded version called USDS under Sky). For BTC holders, Spark offers another avenue: you can supply WBTC as collateral and borrow DAI/USDS stablecoins against it, similar to opening a Maker vault but through a user-friendly interface.
How it works: When you use Spark, you’re interacting with a platform closely tied to MakerDAO’s liquidity. Spark allows deposits of assets like WBTC, ETH, liquid staking derivatives, and stablecoins. You can borrow DAI (USDS) from Spark Lend. Behind the scenes, Spark is empowered by Maker’s Direct Deposit Module (D3M), which can inject DAI liquidity into Spark to maintain competitive interest rates. Essentially, Maker can supply DAI to Spark if borrowing demand grows, helping keep DAI borrow rates relatively low and stable. This is good news for borrowers – you might find that borrowing DAI on Spark has a lower or steady APR compared to other platforms, because MakerDAO subsidizes it to target the DAI Savings Rate.
Interest rates: For lending, Spark primarily offers a place to deposit DAI and earn the Sky Savings Rate (SSR), which is the successor to Maker’s DAI Savings Rate. That’s for stablecoin holders (not our focus here). For borrowing, Spark’s rates for DAI are typically very attractive. If Maker’s target SSR is, say, 3%, the DAI borrow APR on Spark may hover in that range (Maker can adjust liquidity to influence it). When using WBTC as collateral to borrow DAI, you’re essentially getting a MakerDAO-backed loan via a slick interface. Spark doesn’t have its own token yet; any “farming” rewards would come in the form of Sky/MKR in the future if at all.
Collateral and LTV: Spark supports WBTC and similar assets with collateral factors on par with Maker’s risk parameters. In MakerDAO, WBTC currently has a debt ceiling and a stability fee for borrowing DAI. Spark mirrors those constraints but with possibly a friendlier approach. For instance, ETH on Spark has a maximum LTV around 82%, and WBTC might be slightly lower (Maker’s typical WBTC C-Ratio is 150%, i.e. ~66% LTV). Spark might allow WBTC around 75–80% LTV given the Aave v3 code, but Maker’s overall risk framework might enforce something slightly more conservative. In any case, you should maintain a healthy buffer to avoid liquidation – just like borrowing from Maker directly.
Fees: Spark does not charge extra fees beyond the interest (stability fee) on your loan. No withdrawal fees, etc. The interest you pay on a DAI/USDS loan essentially goes to MakerDAO (Sky protocol) as revenue, part of which funds the Savings Rate for DAI depositors. Spark is thus a conduit to Maker – you get the benefit of Maker’s low stablecoin rates without manually dealing with vaults. There is talk that Spark might have its own SPK governance token eventually, but for now governance is under MakerDAO.
Ease of use: Spark is designed to be user-friendly, especially for those who found MakerDAO’s vault interface daunting. If you have used Aave, Spark will feel very familiar – the layout and mechanics are nearly identical (supply assets, borrow assets, see your health factor). This makes it one of the easier ways to get a BTC-collateralized stablecoin loan. Instead of generating DAI through Maker’s Oasis app, a beginner can use Spark’s Aave-like interface to achieve the same result. Do note, Spark is currently focused; it might not have as many assets or features as Aave proper. But for a beginner whose main goal is “Borrow stablecoins against my BTC at a good rate,” Spark is a great option. Just remember that you will receive DAI (USDS) which you can then swap to USD or USDC if needed.
Pros:
· Borrow DAI/USDS at very competitive rates, thanks to MakerDAO’s liquidity provisioning
· Friendly interface (Aave-style) for doing what MakerDAO allows, making it more accessible
· Supports WBTC, ETH, LSDs, etc. as collateral just like major DeFi lenders
· No added fees; transparent rates and deeply integrated with Maker’s robust systems
· Backed by MakerDAO (Sky) governance – a long-standing DeFi project known for overcollateralization and stability
Cons:
· Primarily useful for borrowing stablecoins – if you want to earn on BTC, Spark is not the venue (it’s not paying interest on WBTC deposits, only on stable savings)
· Collateral options, while including BTC, are somewhat limited to safer assets (no exotic altcoins) – which is by design
· Newer product (launched 2023) – has the benefit of Aave’s code security, but still establishing its own track record
· If you need cash (fiat) directly, Spark only gives crypto stablecoins; you’d have to off-ramp those yourself
· Governance in flux: MakerDAO’s “Endgame” plan might change how Spark is run (e.g. a future SPK token)
Nexo – Easy CeFi Crypto Lending for Beginners
Nexo is one of the leading centralized crypto lending platforms that survived the tumult of 2022. It provides a very user-friendly experience via web and mobile app, making it a popular choice for beginners who want to earn interest on crypto or borrow against it without dealing with DeFi complexities. With Nexo, you create an account, deposit your BTC, and the platform handles the rest – lending it out to generate yield or using it as collateral for an instant credit line.
Interest on BTC: Nexo offers interest on Bitcoin held in your account, paid out daily. As of 2025, Nexo advertises up to 4% APY on BTC holdings. The exact rate you get depends on certain conditions: Nexo has a loyalty tier system (Base, Silver, Gold, Platinum) determined by how much NEXO token you hold, and whether you take interest in kind or in NEXO token. For example, to get the maximum 4%, you might need to be in a higher tier and opt to earn interest in NEXO tokens. Lower tiers or flexible withdrawals might yield a bit less (e.g. ~2–3% on BTC). Nevertheless, even the base rate is significantly higher than DeFi’s near-zero on BTC. Nexo can offer this because it lends your BTC to institutional borrowers or uses it in other yield strategies (so you are taking on Nexo’s counterparty risk in exchange for yield).
Borrowing (Crypto-backed loans): Nexo’s flagship product is the instant crypto credit line. You can deposit BTC (or other assets) and immediately borrow cash or stablecoins up to a certain LTV. Nexo allows around 50% LTV on BTC by default – meaning if you deposit $10k in BTC, you can borrow up to $5k. There are no credit checks; your crypto is the collateral. Interest rates on loans range from ~2.9% to 13.9% APR depending on your loyalty tier and how much of your credit line you utilize. For example, Platinum tier clients (with a lot of NEXO tokens) borrowing only a small percentage of available credit might get the ultra-low 2.9% APR, whereas a base-tier user maxing out 50% LTV might pay closer to 13–18% APR. Interest is typically charged daily on the outstanding balance, and you can repay whenever (no fixed installment schedule). If BTC’s price falls and your LTV goes beyond the limit, Nexo will ask for more collateral or partial repayment; otherwise they may liquidate some of your BTC to bring LTV in line.
Fees: Nexo does not charge loan origination fees or account maintenance fees. Withdrawals of crypto are free up to a certain number per month (depending on loyalty tier), after which a small fee applies. If you withdraw fiat (from a loan) to your bank, there might be banking fees, but Nexo itself doesn’t charge for credit line drawdowns. The platform makes money on the spread between what it earns by lending assets out and what it pays to depositors, as well as on loan interest if you borrow. They also have exchange services and earn from trading fees. Importantly, Nexo may rehypothecate (re-lend) your collateral to third parties to generate those yields – this is a standard practice in CeFi, but it introduces risk (if Nexo’s counterparties fail, it could impact Nexo’s finances).
Ease of use: This is Nexo’s strong suit. The experience is similar to a traditional fintech app: you sign up with an email, complete KYC identity verification, and then you can deposit or buy crypto directly in the app. The dashboard clearly shows your portfolio, earned interest, and available credit line. For a beginner, Nexo is extremely accessible – no special knowledge needed. They even provide customer support. It’s available in many (though not all) countries; note that Nexo’s earn product was temporarily unavailable in the U.S. due to regulations (as of 2025, Nexo has been restructuring services for U.S. users, possibly reintroducing some earn features under compliance). Always check current availability in your jurisdiction.
Security & trust: Nexo is a regulated institution in various jurisdictions and claims to hold assets in custody with reputable providers (like BitGo). They have implemented real-time reserve attestations (through an auditor) to show that client assets exceed liabilities, an effort to be transparent after industry collapses. Nexo has not had major hacks. However, being a centralized lender, it is not risk-free – you rely on Nexo’s solvency and honesty. Past competitors like Celsius and BlockFi also seemed fine until they weren’t, so caution is warranted. On the plus side, Nexo managed risks better and avoided high-risk bets, so it remained solvent when others fell. It also has an insurance pool and a large equity cushion. Still, if you use Nexo, consider not exceeding amounts you’re willing to trust to a third party.
Pros:
· Very user-friendly – simple app interface, no crypto knowledge required
· Earn daily compounding interest on BTC (~up to 4% APY) which beats virtually all DeFi rates
· Instant loans with no credit checks – flexible repayment and relatively low rates for top-tier users
· Wide range of supported assets and additional features (swap, Nexo card, etc.)
· Has remained stable through market downturns; one of the few CeFi lenders still standing (completed proof-of-reserves attestations for transparency)
Cons:
· Not decentralized – custodial risk (you must trust Nexo to safely hold and manage your BTC)
· Interest rate perks require holding NEXO tokens and opting for interest in NEXO, which adds token price risk and complexity
· Not available in some regions (had limitations in the U.S. and other jurisdictions due to regulatory compliance) – always check if you can use it legally
· Collateral is rehypothecated by Nexo (they lend it out), which means if many loans default, there’s a risk to the platform (though Nexo says it’s overcollateralized and has insurance)
· Withdrawal limits on free withdrawals – slight inconvenience for active users
Ledn – Bitcoin-Focused CeFi with Transparency
Ledn is a Canada-based crypto lending company that has carved out a niche serving Bitcoin users. It offers two main products: Bitcoin savings accounts (to earn interest) and Bitcoin-backed loans (to borrow against your BTC). Ledn’s approach is somewhat conservative and transparency-oriented – for instance, they were one of the first to conduct a formal Proof-of-Reserves attestation by a third-party auditor, proving that client assets were fully accounted for. If you’re a Bitcoin “hodler” who prefers a straightforward service, Ledn is a strong contender.
BTC interest account: With a Ledn Growth account, you can deposit BTC (or USDC) to earn interest. The interest is paid monthly. The rate is usually tiered: for example, the first 0.1 BTC might earn a higher rate and amounts above that a lower rate. As of 2025, you can earn around 2.0–2.5% APY on Bitcoin with Ledn. (Rates can change with market conditions; Ledn’s rates were higher in bull markets and adjusted downward in bear markets.) This rate is lower than what Nexo advertises for BTC, but Ledn perhaps takes a more cautious approach to generating yield. On USDC stablecoins, Ledn offers higher rates (up to ~8.5% APY), but for BTC specifically ~2% is the ballpark. There is no minimum lock-up required unless you opt for a fixed-term (Ledn’s BTC interest is typically flexible).
BTC-backed loans: Ledn lets you borrow USD or USDC stablecoin by putting up your Bitcoin as collateral. The standard LTV is 50% – so, similar to Nexo, half of your BTC’s value can be borrowed. Uniquely, Ledn gives you a choice: a “Standard” loan where they are allowed to rehypothecate (lend out) your BTC collateral, or an “HODL” loan where they do not lend out your BTC to others. If you permit rehypothecation (Standard), the interest rate is lower: about 10.4% annual (with a 2% admin fee). If you choose the no-rehypothecation (HODL) option, the rate is higher – around 12.4% APR – because Ledn can’t use your BTC to generate yield elsewhere. This is a pretty innovative feature, letting users decide on that risk trade-off. Either way, interest is charged monthly and you can make interest-only payments and repay the principal at the end (loans typically 12 months but can be renewed). If BTC price drops such that your LTV goes above 70%, Ledn will issue a margin call (you’d need to add collateral or partially repay). At ~80% LTV, they will liquidate enough BTC to restore balance, as per their terms.
Fees: Ledn’s savings accounts have no fees to deposit or withdraw crypto (aside from normal network transaction fees). For loans, there is typically a one-time 2% admin fee on the loan principal for setup. Interest is quoted as an annual rate (e.g. 10.4% plus that fee makes an effective 12.4% APR). There are no monthly service fees beyond the interest. Ledn doesn’t have a token or tier system – the rates are the same for everyone, which keeps it simple.
Security & transparency: Ledn uses BitGo as its primary custodian for holding BTC collateral and assets. BitGo is a reputable crypto custody firm that provides insurance and secure storage (this is better than a company self-custodying with less oversight). Ledn underwent a Proof-of-Reserves attestation (coordinated by Armanino LLP in 2021 and again later) – basically, customers could verify their balances were included, giving confidence that Ledn isn’t running fractional reserves. This level of transparency set it apart from other CeFi lenders. Ledn also has a good track record of risk management; it did not have exposure to the collapses of Celsius, etc. One of its founders is known in the Bitcoin community, and the company has generally aimed to be trustworthy and compliant (registered in Canada, expanding globally). Still, remember it’s a centralized service: you are handing your BTC to Ledn, and while they mitigate risks, those risks (counterparty, regulatory) still exist.
Ease of use: Ledn’s platform is straightforward but more bare-bones than flashy apps like Nexo. You sign up with email and KYC, then you can deposit BTC or USDC to your account. The dashboard will show your balances and earned interest. To initiate a loan, it’s a guided process – you select how much you want to borrow, see how much BTC is needed as collateral, and then lock that BTC in a dedicated address. Ledn’s customer service will assist via email for any issues. It’s a very no-frills, focus on BTC kind of service, which many beginners actually appreciate. There’s no confusing token or membership tiers; what you see is what you get.
Pros:
· Focused on Bitcoin holders – products tailored to BTC (and stablecoins) without distractions
· Transparent operations: completed Proof-of-Reserves audits to prove solvency
· Option for no rehypothecation loans (you can choose more security for a bit higher interest, or vice versa)
· Competitive stablecoin yields and reasonable BTC yields given the low-risk approach
· Simplicity and consistency: no token requirements, everyone gets the same rates
Cons:
· BTC interest rate (~2%), while decent, is lower than some competitors’ promotional rates (could be a trade-off for lower risk)
· Borrowing rates (10–12% APR) are high compared to DeFi options like Maker or Aave (which can be ~5%) – Ledn’s rates reflect CeFi’s need to make a profit and cover custodial costs
· A 50% LTV limit – you can’t borrow as high a percentage as some DeFi platforms might allow (Aave sometimes ~70% LTV), but this is for safety
· Centralized control: you must trust Ledn and its custodian; even with audits, there’s still custody and regulatory risk
· Limited asset support – essentially BTC and USDC/USDT only. If you wanted to earn interest on a variety of altcoins, Ledn isn’t the place
Trends and Updates in 2025 for BTC Lending
Crypto lending has rebounded in 2025: the total value locked in DeFi lending protocols surpassed$56 billionby mid-2025 after recovering from the 2022 market crash. DeFi lending now accounts for about 35% of all DeFi activity, reflecting renewed confidence as centralized lenders faltered in 2022. This growth highlights how much the landscape has evolved, with users increasingly turning to transparent on-chain protocols.
The crypto lending industry in 2025 looks much different than it did a few years ago, shaped by past events and new innovations:
Aftermath of CeFi Lender Collapses: The failures of CeFi lenders like Celsius, BlockFi, and others in 2022 sent shockwaves through the community. In response, the surviving CeFi platforms (e.g. Nexo, Ledn) have doubled down on transparency and prudent risk management. We’ve seen moves like proof-of-reserves attestations becoming an industry standard, lower leverage, and some companies exiting or geo-restricting services to comply with regulations. For beginners, this means fewer—but seemingly stronger—CeFi options in 2025. The lesson learned is to not chase unsustainably high yields and to favor platforms that can prove their solvency. CeFi rates on BTC are now lower than the ~6%+ APYs of the 2021 era, but they’re built on more solid ground.
Rise of Decentralized Lending: DeFi lending protocols have grown to new heights in 2025 (over $56B TVL). Users are increasingly trusting code over companies for lending. Innovations like Morpho’s peer-to-peer layer show how DeFi is addressing its own efficiency issues, squeezing out better rates for users. Meanwhile, established protocols like Aave and Compound have continued to iterate (Aave v3 deployments on multiple chains, Compound Treasury products, etc.), making DeFi more accessible (cheaper transactions on Layer-2) and broadening collateral options (even experimenting with real-world asset collateral). The result is that even beginners, through improved interfaces or aggregator apps, can tap into DeFi lending if they choose.
Aggregators and User Experience: A notable trend is the emergence of loan aggregators and improved wallet integrations. For example, platforms like Rocko (as mentioned in some 2025 lists) aggregate lending offers from Aave, Morpho, Compound into one interface to help users find the best rate. This kind of meta-platform simplifies DeFi for the end-user – you might use one app that sources liquidity from many protocols. We also see wallets (e.g. MetaMask, Argent) offering “earn” or “borrow” tabs internally, which are powered by these protocols but abstract away the complexity. All this means newcomers don’t necessarily need to manually navigate each DeFi app; they can access these yields through more familiar interfaces.
Regulatory Clarity and Geographic Differences: By 2025, some regions have clearer rules on crypto lending. The EU’s MiCA regulations, for instance, provide a framework that CeFi platforms must follow. In the U.S., regulators cracked down on interest-bearing accounts (that’s why Nexo’s Earn had paused in the U.S. for a while). This has led to some platforms restricting or modifying services in certain countries. On the flip side, El Salvador and some other jurisdictions have become crypto-friendly and even use Bitcoin as legal tender, which could spur more Bitcoin-backed financial services there. The key point for users is to check what services are legally available to them and whether any protections (or lack thereof) apply in their country.
MakerDAO’s Evolution: One big update was MakerDAO’s rebrand to “Sky Protocol” and the introduction of a new stablecoin (USDS). Maker’s ecosystem now includes Spark (which we discussed) as a lending frontend. They also launched initiatives like the DAI Savings Rate (now Sky Savings Rate) which by 2025 was raised significantly to attract capital (in 2023, Maker had a high DSR around 8%). This indicates a trend of DeFi protocols actively competing for users by offering attractive yields, funded by protocol revenues. For BTC lenders, while you won’t earn 8% on BTC directly, you could convert BTC to a stablecoin or yield-bearing asset if you wanted to take advantage of such rates – but that involves additional risk (exchange rate risk, smart contract risk).
Institutional Participation: Institutional lending is also booming quietly. Platforms like Maple Finance and Arch Lending are facilitating under-collateralized loans to institutions, and even traditional banks (like JPMorgan) have piloted crypto-collateralized lending programs. While retail users might not directly engage with these, the spillover effect is that the crypto credit market is maturing. Rates for borrowers might become more competitive as more capital (from institutional players) is available. At the same time, institutions borrowing BTC or stablecoins could indirectly improve the lending APYs for retail (more demand for your lent assets). We may see a convergence of CeFi and DeFi liquidity – e.g., a bank might borrow DAI from Aave or BTC from a platform to service clients.
Layer-2s and Bitcoin on Ethereum: Lastly, a trend to note for BTC lending is the proliferation of Bitcoin-backed assets on various chains. Wrapped Bitcoin (WBTC) is still dominant on Ethereum, but concerns over its custody (BitGo) and the desire for more decentralized versions have led to alternatives like TBTC (v2) and Implied BTC via new protocols. Also, Bitcoin’s own ecosystem is evolving (e.g., Stacks and Rootstock enabling Bitcoin DeFi, although these remain niche for now). For the average user in 2025, using WBTC on a large DeFi protocol is the most practical way to deploy BTC in lending. But keep an eye on newer trust-minimized BTC wrappers – they could become supported collateral in major lending markets, further bridging Bitcoin and DeFi.
In summary, 2025’s crypto lending environment is more mature and arguably safer for newcomers than in the past. DeFi platforms have proven resilient and are easier to use via aggregators, while CeFi platforms have trimmed risk and improved transparency after hard lessons. Yields are generally lower than the wild west days (nobody is offering 20% on BTC anymore without extreme risk), but they are more reliable. Beginners should still approach any platform with due diligence – understanding how it works, what the risks are (be it smart contract bugs or company bankruptcy), and not overextending with leverage. The good news is there are plenty of solid choices now for earning a bit of passive income on your Bitcoin or getting a loan when you need cash but don’t want to sell your crypto.
Conclusion – Which BTC Lending Platform is Best for You?
For a beginner crypto investor, the “best” platform really depends on your priorities:
If simplicity and immediate access are most important: A CeFi platform like Nexo is very appealing. You can deposit BTC in a few clicks and start earning interest, and if you need a quick loan, it’s easy to arrange with no technical fuss. Nexo’s slick app and relatively high BTC yield (compared to DeFi) make it a top choice for newbies who just want things to work. Similarly, Ledn offers a straightforward experience focused on Bitcoin, with the added assurance of audits – it could be a good fit if you value transparency and don’t mind the limited features. Just remember, with any CeFi service, you are trusting the company with your coins. Use them for convenience, but maybe not for your entire life savings if you’re risk-averse.
If you never want to relinquish custody of your BTC: You might lean towards DeFi options like Aave or Compound (using WBTC) or even a specialized service like Unchained Capital. DeFi ensures you retain control via your wallet – you can withdraw anytime as long as the protocol is solvent (and you’re not borrowed to your limit). Unchained gives an even stronger guarantee of control through multisig, at the cost of higher interest. These are great for security-conscious users. However, they require more learning. Aave, for example, might be overwhelming at first, but many beginners have successfully started with small amounts to get the hang of it. Once you learn DeFi lending, it’s empowering – no signup, no counterparty risk besides the protocol itself.
If your goal is to earn yield on BTC: Note that DeFi isn’t very rewarding for BTC lenders right now – as we saw, APYs are near zero. You’d get a lot more from CeFi like Nexo or Ledn (a few percent). Another strategy is using DeFi but not with BTC directly: for instance, you could convert BTC to a stablecoin or to an ETH staking derivative to earn higher yields, but that introduces price risk and is not BTC lending per se. So for pure BTC yield, a trusted CeFi lender or perhaps a Bitcoin native service (if you find one with decent rates) is better. Just weigh the risk of custody – maybe diversify across a couple (e.g. some BTC in Ledn, some in Nexo) if you go that route.
If you want to borrow against BTC: If low interest matters, Spark (MakerDAO) or Aave will likely let you borrow stablecoins at a lower rate (~5% or below) than CeFi loans (~10%+). The catch is you must be comfortable using a DeFi app and managing your own collateral. On the other hand, CeFi loans can be more convenient if you want cash in your bank (not just crypto stablecoins) and don’t mind paying a bit more for the service. Unchained Capital stands out for borrowers with large BTC holdings who want the absolute confidence that their BTC isn’t going anywhere – you pay a premium for that peace of mind, but it might be worth it if you’re taking a big loan and have a strong HODL ethos.
In any case, do your own research and start small. Perhaps test an Aave or Compound with a tiny amount of WBTC to see how it works, even if you use Nexo for the bulk of your funds. Or vice versa, try a small loan on Nexo and observe the process. It’s also wise to keep an eye on industry news: platforms can and do change terms, and new competitors or regulations can emerge. The good news is that by 2025, we have a well-rounded set of options for Bitcoin lending, each with their advantages.
To recap a recommendation for a true beginner:
· Earning interest easily: Nexo (easy and decent APY) or Ledn (simple and transparent) are great starting points. Just remain cautious and perhaps avoid locking up for long terms so you have flexibility.
· Borrowing cash with BTC: If you’re U.S.-based or security-focused, Unchained Capital offers unmatched trustworthiness. If you want a low-rate crypto loan and are willing to DIY, Spark or Aave on Ethereum (with WBTC) will give you good rates – you’ll get stablecoins which you can convert to cash via an exchange.
· Balanced approach: You could even use a mix: keep some BTC in DeFi for self-custody and some in CeFi to earn interest. Diversifying platforms mitigates the risk of any one failing.
Finally, always remember the risks: crypto markets are volatile (your collateral can drop in value), smart contracts, though audited, can have bugs, and companies can face insolvency or hacks. Never invest or borrow more than you can afford to lose, and closely monitor any loans (set price alerts to manage collateral). With those precautions in mind, crypto lending can be a useful tool – whether to earn a bit of passive Bitcoin or to unlock liquidity from your BTC holdings. Happy lending, and stay safe out there!