Ledger Wallet's crypto loan feature offers four Ethereum markets for borrowing against wrapped Bitcoin (BTC), giving eligible holders access to stablecoins without selling their tokens but exposing pledged assets to liquidation.
Ledger began rolling out the service Oct. 7, according to Morpho. At launch, borrowers can pledge either cbBTC or wBTC and borrow USD Coin (USDC) or Tether (USDT), Ledger's product guide says. Each collateral token has a market for each stablecoin, making four in total.
The collateral tokens represent Bitcoin on Ethereum. Bitcoin held on its own network cannot be used in these markets. Ledger says the arrangement lets borrowers obtain stablecoins while retaining exposure to their wrapped Bitcoin, although they must pay interest and maintain enough collateral to support the loan.
Morpho's contracts administer the loans and hold the pledged tokens, while Yield.xyz connects the markets to Ledger Wallet. The app shows a loan's ratio to its collateral value and lets borrowers make repayments or increase collateral.
Ledger says borrowers approve actions such as taking out and repaying a loan on a hardware device. That approval does not apply to liquidation: If a position reaches its threshold, its collateral can be sold automatically without a new signature. Changes in collateral value therefore affect the risk a borrower faces while the loan remains open.
Borrowing rates vary with use of each market. Morpho says deposits in its earlier Stablecoin Earn product can fund these loans, and borrowing demand may improve lenders' returns. Borrowers bear the interest cost and the risk of losing pledged tokens through liquidation.
Ledger restricts access to the feature by location.
