Yield (on Bitcoin)

What is Yield?

A return earned on Bitcoin holdings, typically generated by custodial platforms through lending out deposited BTC. Lygos does not offer yield on deposited Bitcoin, and this is by design. Yield programs require rehypothecation, because your BTC must be lent out to generate returns. Lygos's DLC architecture makes this impossible. Your collateral is locked in an on-chain contract, not available for the platform to use. If you want yield, you need a custodial platform. If you want security, you want Lygos.

Full Definition

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.

How Lygos Uses This

Lygos does not offer yield on deposited Bitcoin, and this is by design. Yield programs require rehypothecation, because your BTC must be lent out to generate returns. Lygos's DLC architecture makes this impossible. Your collateral is locked in an on-chain contract, not available for the platform to use. If you want yield, you need a custodial platform. If you want security, you want Lygos.

How Lenders Compare

	Lygos	Ledn	Nexo	Unchained
Rehypothecation	0% (impossible by design)	100%. Your BTC may be lent out	Yes, platform re-lends assets	No
Custody	Non-custodial (DLC)	Custodial	Custodial	Collaborative multisig
APR	10%	9.99–11.49%	2.9%+ (loyalty tier dependent)	14.18%

Full comparison

Why this matters for borrowers

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.

Explore further

Compare Lenders Lygos vs Ledn Loan Scenarios Full Glossary Loan Calculator

Borrow against your Bitcoin without giving up custody

Starting at 10% APR, $0 origination fees, and DLC-secured collateral on the Bitcoin blockchain.

Calculate Your Loan

Back to Glossary