What’s the Difference Between Lantern and Past Centralized Lending Platforms?

In the evolving crypto landscape, many platforms have emerged, offering various ways to earn returns on crypto assets. High-profile names like BlockFi, Celsius, Voyager, Genesis, Gemini Earn and others have explored different models, often promising attractive yields. However, the complexities and risks of their strategies have led to the unfortunate demise of these platforms and their users.

Lantern Finance carves out a distinct path in this ecosystem, emphasizing safety, user autonomy, and a commitment to facilitating a straightforward staking experience. Let's dive into what sets Lantern apart and how we're shaping a new narrative in the crypto lending and staking space.

A Foundation of Safety and User Empowerment

At the heart of Lantern Finance is a dedication to the safety and empowerment of our users. Unlike previous platforms that took an active role in employing high-risk strategies to generate returns, Lantern focuses on providing a secure, user-friendly environment for crypto staking. Our platform is designed to give you the control to manage your crypto investments according to your preferences and risk tolerance.

The Flexibility and Autonomy of Staking

Staking with Lantern introduces a significant departure from traditional yield-generating platforms. Here's how we’re different:

User-Led Decisions: At Lantern, we firmly believe in empowering our users to make their own investment choices. Unlike past platforms where decisions were often made on behalf of users, at Lantern, you decide whether to stake your assets. Our role is to facilitate this choice by providing a seamless platform that supports your staking activities.

Blockchain as the Counterparty: In staking, there is no traditional counterparty risk as you might find in other financial transactions. Instead, the blockchain itself is your counterparty. This means that the rewards and rates are not dictated by Lantern but are determined by the network. It's a transparent, decentralized process that offers a clearer, more predictable path to earning rewards on your crypto.

This is a stark difference to the myriad of counterparty risks found in the previous crop of lending platforms. For example, nearly all of the past crypto lenders had exposure to 3 Arrows Capital, which declared bankruptcy in mid-2021. BlockFi engaged in arbitrage bets such as with the Grayscale Bitcoin Trust (GBTC) premium, which ended up becoming a big, losing-trade. Celsius deposited user funds into various risky DeFi strategies.

Ancillary Services to Enhance Your Experience: While you control your staking decisions, Lantern is here to enrich your experience with ancillary services. We offer an intuitive user interface (UI), comprehensive reporting, and dedicated customer support to ensure your staking journey is smooth and rewarding.

100% Guaranteed Access

Lantern stands out for its approach to liquidity. Should every one of Lantern’s users choose to unstake and withdraw their funds tomorrow, they could do so freely and without delay. Currently, it takes between ~2-7 days to completely unstake funds on the Ethereum network. Our operational model does not involve engaging with risky trading strategies or DeFi for yield generation. With BitGo as our custodian, your crypto is in safe hands, and our straightforward approach eliminates the counterparty risks that have affected other platforms.

Rehypothe-what?

When we reviewed the previous iteration of lending platforms, we found that when users borrowed against their crypto, the lending platforms would “rehypothecate” the user’s collateral. Basically, they would take the user’s crypto, which was posted as collateral for the loan, and try to earn extra money with it by lending it out to other counterparties. This meant that if someone paid back their loan, there was not a guarantee they would receive their crypto back as it could be tied up somewhere else. That’s highly risky for borrowers! As explained in our recent blog post on borrowing, when you choose to borrow, your crypto does not move and remains staked.

Learning from the Past to Innovate for the Future

The crypto industry has witnessed the rise and fall of various platforms, each offering lessons on risk, reward, and the importance of transparency and user control. Lantern Finance is built with these lessons in mind, aiming to provide a safer, more reliable platform. To read more about how we were personally impacted by these lenders, check out The Road to Lantern blog post. By emphasizing user choice, blockchain-based rewards, and solid support services, we're redefining what a crypto lending platform can be.

Conclusion

In a sector where the balance between risk and reward is crucial, Lantern Finance emerges as a platform committed to user safety, autonomy, and support. Our staking model puts you in control, backed by the security and predictability of blockchain technology. We're not just another crypto platform; we're your partner in navigating the crypto landscape with confidence.

Curious to learn more or have questions? We're here for you. Get in touch with us at [email protected] or call us at (415) 365-0100 and we would be happy to answer any questions for you.