A return earned on Bitcoin holdings, typically generated by custodial platforms through lending out deposited BTC.
A return earned on Bitcoin holdings, typically generated by custodial platforms through lending out deposited BTC. Lygos does not offer yield on deposited Bitcoin. Its DLC design constrains how collateral can move by locking it in an on-chain contract with pre-signed outcomes instead of placing it in a platform-controlled yield program.
Yield on Bitcoin refers to earning a return on BTC holdings, typically through lending programs offered by custodial platforms. The platform takes custody of your Bitcoin and lends it to institutional borrowers, market makers, or DeFi protocols, sharing a portion of the interest earned with depositors. Bitcoin yield programs were popularized by Celsius (offering up to 17% APY), BlockFi, and Nexo. However, the 2022 CeFi crisis revealed that many yield programs were unsustainable. Platforms were taking excessive risk with deposited assets, and when those bets failed, customer Bitcoin was lost. The lesson: if someone is paying you yield on your BTC, someone else is using your BTC to generate that yield.
Lygos does not offer yield on deposited Bitcoin. Its DLC design constrains how collateral can move by locking it in an on-chain contract with pre-signed outcomes instead of placing it in a platform-controlled yield program.
| Lygos | Ledn | Nexo | Unchained | |
|---|---|---|---|---|
| Rehypothecation | Constrained by DLC design | May be re-posted to an institutional funding partner | Yes, platform re-lends assets | No |
| Custody | Non-custodial (DLC) | Custodial (segregated) | Custodial | Collaborative multisig |
| APR | 10% | 9.25–11.49% | 0.9–15.9% (wealth tier and LTV dependent) | 14.18% |
Understanding Yield (on Bitcoin) provides context for how Bitcoin lending fits into the broader financial ecosystem. DeFi concepts are reshaping how people think about borrowing and lending.
Starting at 10% APR, $0 origination fees, and DLC-secured collateral on the Bitcoin blockchain.