Sygnum Cuts DeFi Barriers: Staked SOL Now Accepted as Loan Collateral
Banking on Solana’s staking rewards just got riskier—or smarter, depending on who you ask. Sygnum Bank now lets clients pledge staked SOL for loans, blending DeFi yields with old-school leverage.
Liquidity without unstaking: Borrow against your staked position while still earning those sweet 5-7% APY rewards. Perfect for HODLers who’d rather not trigger taxable events or miss the next SOL rally.
The fine print: Sygnum’s move exposes the irony of crypto ’banking’—using your locked-up assets to borrow fiat from... a bank. So much for disrupting finance, huh?
Staked Solana at Sygnum
Sygnum, a Swiss-Singaporean digital asset bank, began offering crypto staking nearly four years ago. The firm has since diversified its interests, securing a crypto brokerage license in 2023 and achieving unicorn status with a massive funding round earlier this year.
Today, Sygnum offers another staking service by letting staked Solana act as collateral for Lombard loans.
To be clear, Lombard loans are a specialized type of loan that bears no relation to Lombard Protocol, a crypto staking firm. These products are typically offered to high-net-worth individuals or institutional investors, and Sygnum is offering this Solana deal to the latter category.
News: Sygnum enables staked SOL as collateral as Lombard Loan Volume Doubles
Sygnum adds staked Solana (SOL) to its growing portfolio of over 20 tokens eligible as collateral for Lombard loans, allowing clients to maintain staking rewards while accessing fiat liquidity… pic.twitter.com/6xwclpC7GL
Sygnum already accepts over 20 different tokens as collateral for these loans, but this is its first staked option. The bank offers several key advantages for clients who pledge staked Solana.
For one thing, the loans are low-cost because a large chunk of the staking rewards goes towards paying the usual fees. Clients pledging regular Solana tokens have to pay significantly more and do not receive any passive income. Sygnum hopes that this new collateral option will appeal to clients:
“By enabling staked Solana as collateral, we’re addressing a key client need to optimize yield while maintaining liquidity. This enhancement builds on our proven track record in crypto-backed lending, recently demonstrated by our $50 million Bitcoin-backed syndicated loan to Ledn last August,” claimed Benedikt Koedel, Head of Credit & Lending at Sygnum.
Last November, the firm’s published research suggested a growing institutional demand for crypto exposure. Its recent experience corroborates this data, as Sygnum claimed that institutional demand caused its own loan volumes to double in the last year.
Staked Solana will help develop Sygnum’s loan collateral portfolio to meet this increased demand.
The bank’s in-house custody service will offer full segregation of client positions on-chain, instead of a pooled solution that mingles assets together.
Sygnum will also stake Solana itself through channels like its “user interface, API integration, or client relationship managers.” These tools ensure security and flexibility for all institutional clients.
