Ledn vs Ducat: Custodial vs Non-Custodial Bitcoin Loans

I want to be clear upfront: this is not a hit piece on Ledn. They are a legitimate, well-run company. They have originated billions in Bitcoin-backed loans. They have published proof of reserves when few others did. They did right by their customers when the rest of the industry was collapsing.

But we have built something structurally different, and the differences are worth explaining clearly for anyone trying to choose between the two.

The fundamental difference

Ledn is a custodial CeFi lender. When you borrow from Ledn, you deposit your Bitcoin with them. They hold it. You trust that they are solvent, compliant, and will give it back when you repay.

Ducat is a non-custodial protocol on Bitcoin Layer 1. When you borrow from Ducat, your Bitcoin goes into a vault secured with . The vault is yours. Ducat the protocol cannot take your Bitcoin. There is no company to trust for custody.

This is not a subtle distinction. It changes the risk model entirely.

Ledn: what it does well

Ledn has been operating since 2018. They are registered in Canada, published a proof of reserves report audited by Armanino in 2022, and have continued publishing reserve attestations. They stayed solvent through a period when Celsius, BlockFi, Voyager, and others did not. That track record matters.

Their loan process is smooth. Minimum loan is $1,000. Rates run around 10-13% APR fixed. KYC and AML checks are required. You can borrow in dollars or stablecoins (USDC). If you want to borrow more than your loan proceeds and buy more Bitcoin (their B2X product), Ledn enables that.

For most borrowers who want straightforward dollar liquidity, do not have strong opinions about custody, and want to deal with a company that has a support team and a phone number, Ledn is a reasonable choice.

Ducat: what it does differently

Ducat does not hold your Bitcoin. Full stop.

Your collateral is locked in a FROST vault on Bitcoin Layer 1. The protocol can liquidate the vault if your LTV exceeds the threshold, but that liquidation is governed by protocol logic on-chain, not a decision made by a company. There is no customer service team, no company headquarters, and no scenario in which a regulator can instruct Ducat to freeze your account, because there is no entity holding your funds.

You borrow UNIT, a stablecoin issued as a . The entire system, collateral, stablecoin, vault logic, lives on Bitcoin Layer 1.

There is no KYC. There is no minimum loan denomination in the same sense. The tradeoff is that you are responsible for understanding the protocol, managing your LTV, and there is no support team to call.

Side-by-side comparison

When to use Ledn

If you want dollar-denominated loans with a known entity and a compliance framework you can understand, Ledn makes sense. If you are borrowing a significant amount and want recourse if something goes wrong, a regulated company offers something a protocol cannot.

Ledn is also better suited if you want to borrow in USDC and use it directly on Ethereum DeFi or convert to USD.

When to use Ducat

If self-custody is important to you and you do not want your Bitcoin in a company's hands even during a loan, Ducat is the natural choice. If you are in a jurisdiction where KYC compliance is complicated, or if you simply believe non-custodial is the right architecture for financial protocols, Ducat fits better.

The Celsius collapse was the clearest possible demonstration of why custody matters. Celsius customers deposited Bitcoin, trusted the company, and found their withdrawal access suspended for over a year when the company failed. Non-custodial protocols do not fail in that way. The risk profile is different, not the risk eliminated, but different in ways that matter.

On rates

Ledn's rates are currently more predictable because they are fixed by the company. Ducat's rates are protocol-set and will change as the ecosystem develops. At this stage of Ducat's development, rate comparisons should be treated as directional rather than definitive.

For a full picture of rates across the market, see the .

My honest take

I built Ducat because I believe Bitcoin lending should stay on Bitcoin and custody should stay with the borrower. That is a principled position, not just a product feature.

But Ledn fills a real role. Not everyone wants to manage their own vault. Not everyone is comfortable with protocol risk rather than company risk. Both models exist because different people have different needs and different risk tolerances.

The right choice depends on which risks you are more comfortable with.