Can You Use Digital Assets As Collateral?

Explore the security and peace of mind custodial services offer for crypto-backed loans, providing insurance and protection against the volatility and risks of DeFi.
Lewis Jackson
CEO and Founder

If you're considering taking loans against your crypto assets, safety should be a top priority. DeFi is popular, but there's a custodial service approach that offers more security and insurance. Here's why you might consider this option.

Why Choose a Custodial Service Over DeFi?

Pros:

Asset Security

Specialises in securing your digital assets.

No Financial Models

Your assets aren't used for high-risk yield generation.

Cons:

Cost

There's a fee for vault security, varying by the size of your holdings.

Working with Banks for Loans

  • APY: 3-4%
  • LTV ratio: 60-80%

Recommendation: Aim for a 50-60% LTV due to crypto's volatility.

Why This Method is Better

You get a "first right of refusal" during capital calls, unlike in DeFi, where your assets can be automatically liquidated if values drop.

Insurance & Peace of Mind

  • $50M Specialised Crime Insurance per vault, specifically against hacks.
  • Multi-Vault Options for additional coverage.

If you're looking for a safer, insurable way to take loans against your crypto, this custodial service is a strong alternative to DeFi. With robust insurance, lower risks, and "first right of refusal," it's an option worth discussing.

If you want to action this custody solution and you have more than $500k in digital assets, book your discovery call with Lewis today.

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