Lantern Finance

Crypto-backed lending

September 1st, 2025

A crypto company? In this economy?

Here’s the simple reality: people bought crypto. Some people have built substantial wealth because of crypto. And now the government doesn’t really know how to extend the usual financial functions (in this case, loans) when your entire net worth is on the blockchain.

Thus, one can argue that a company like Lantern Finance exists out of necessity!

Two SF events we’re hosting:

  • Tuesday, Sept 23: Seed+ Founder Dinner. We’re inviting 20 founders for dinner with our friends at Fidelity Private Shares and Intercom. Our dinners fill up very quickly, so if you’re a seed+ founder who’d like to attend, RSVP ASAP.

  • Wednesday, Sept 24: Fireside with Max Marchione, co-founder of Superpower. Diving into all things zero to one in startups, as well as his thoughts around the future of personal health tech. Open to all!

Arek and Ethan 🦄

Lantern Finance is a U.S.-based fintech startup that offers loans using cryptocurrency as collateral, rather than requiring credit checks like traditional banks do. In addition to providing liquidity, these loans allow borrowers to retain ownership of their crypto and avoid the taxable event that comes with selling. The process of getting a loan is entirely digital and gives users access to their funds instantly. The currency used as collateral is also insured up to $250 million after being stored with BitGo, a crypto custody provider.

Check it out: lantern.finance

Lantern Finance earns revenue through crypto-backed loans, offering plans for lenders and borrowers. Lenders provide capital, earning either an 8% annual percentage yield with no lock-up (lenders can withdraw at any time), a 9% APY with a 6 month commitment, or a 10% APY with a 12 month commitment. Using the capital from these lenders, it funds crypto-backed loans, through which borrowers can get anywhere from 25% to 50% of their crypto’s value at a fixed rate for a year, and either refinance or pay in full at the end of the term.

  • Over $1 million raised in its pre-seed round led by Orange DAO, Supermoon Ventures, and Andover Ventures

  • Accepted into Techstars Web3 accelerator, a prestigious mentorship-driven program, in 2024

  • Works with nine cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Litecoin (LTC), XRP, Dogecoin (DOGE), Cardano (ADA), Hedera (HBAR), and Stellar (XLM)

  • Grew month over month loan volume by over five times in July

If you have been on the internet for the past 8 years, chances are you have witnessed the crypto boom. Around 17% of American adults own crypto as of May 2024. Its ups and downs and its high-risk, high-reward tendencies have become mainstream news and have earned it the reputation of an innovative, yet volatile, investment. 

At the end of 2020, Bitcoin was selling at $28,993, a 416% increase in value from the start of that year. As of now, Bitcoin sells at well over $100,000. Holding Bitcoin during this time period would turn a profit, albeit at the cost of liquidity. Lantern Finance addresses this dilemma. Prospective borrowers can put up some of their crypto to Lantern, and in exchange, get a loan for 25% to 50% of the crypto’s valuation at a fixed rate over a year. This provides borrowers with liquid cash while allowing them to retain ownership of their crypto. 

An example of some of the rates advertised on Lantern’s website.

What sets Lantern apart from other crypto-backed loan platforms is its accessibility to the public. Many other crypto-based lending companies are tailored for large investors like hedge funds and corporations looking to diversify their holdings. For them, crypto-backed loans are an opportunity to free up capital for business operations and large-scale investments without having to pay taxes on sold-off crypto holdings. On the other hand, Lantern’s clientele better represents the average consumer. Its XLM loans, for example, have a minimum loan requirement of only $1,000. And while other lenders only accept Bitcoin and Ethereum as collateral, Lantern accepts nine different cryptocurrencies. With up to 80% of most institutions’ portfolios being concentrated in Bitcoin or Ethereum, this choice once again appeals to the average individual. 

Lantern also has a business mode that is actually quite similar to the process for getting a conventional loan. Instead of putting down a house or car as collateral, Lantern asks for crypto. The interest rates are fixed, instead of being variable based on the market, like most conventional loans. The only difference is, the conditions are more borrower-friendly. The cryptocurrency market is volatile, which is something many lenders take advantage of by charging 2% to 2.5% liquidation fees. In comparison, Lantern charges no liquidation fees. This simplicity makes it very user-friendly. 

As crypto adoption grows, so will the market for crypto-backed loans. As we see an increase in the public investing in crypto, rather than just institutions, Lantern’s focus on user-friendliness and accessibility will ensure its path to becoming a unicorn.