Ledger Launches BTC Yield Feature with Lombard and Figment

Ledger just made it easier for Bitcoin holders to earn rewards without giving up control of their coins. The hardware wallet giant teamed up with Lombard and Figment to roll out a new “BTC yield” option inside its app. This move lets users tap into DeFi yields while keeping their BTC in self-custody. But with yields starting low, is this the game-changer long-term holders have waited for? Dive in to see how it works and what it means.

Ledger’s latest feature activates bitcoin rewards right in the Wallet app. Users can now access Lombard’s yield-bearing LBTC tokens through a Figment-powered dApp in the Discover section. This setup lets self-custody holders earn on their BTC without moving assets to risky platforms or changing Bitcoin’s core network.

The partnership focuses on security and control. Ledger users convert BTC to LBTC, which then stakes on Bitcoin-adjacent networks via Babylon’s infrastructure to generate rewards. No need to hand over keys or trust third parties blindly. It’s a big step for those who hoard BTC but want it to work harder.

Launched on January 14, 2026, this integration targets the millions of Ledger users holding over 20% of all Bitcoin. Early adopters praise it for blending cold storage safety with DeFi perks.

How the BTC Yield System Actually Works

To get started, users open the Ledger Wallet app and head to the Figment dApp. There, they can swap BTC for LBTC, a 1:1 backed token that earns yield by securing networks like those tied to Babylon’s staking protocol.

Rewards come from staking LBTC, which supports Bitcoin ecosystem growth without touching the main chain. Current annual percentage yield (APY) hovers at 0.41%, based on data from DeFiLlama tracked as of January 2026. That’s low compared to other crypto yields, but it’s a start for conservative BTC fans.

Figment handles the tech side, ensuring smooth connections. Lombard provides the LBTC token, which has already onboarded billions in BTC value across DeFi. Users stay in full control, redeeming LBTC back to BTC anytime.

This isn’t just plug-and-play. Ledger warns that while self-custody remains, converting to LBTC involves some smart contract interactions, so users should understand the basics before diving in.

Benefits for Long-Term Holders and Traders

For folks sitting on BTC for years, this feature unlocks passive income without selling or risking hacks. Long-term holders, who make up most Bitcoin owners, can now put idle assets to work. Ledger execs say it addresses a key gap: over 90% of BTC sits frozen in wallets, missing out on yields that Ethereum stakers enjoy.

Active traders get flexibility too. They can earn while holding, then trade LBTC in DeFi markets for more opportunities. This could boost Bitcoin’s role in DeFi, where it’s often sidelined due to its focus on security over speed.

Here’s a quick look at potential upsides:

• Secure yields: Rewards without custody loss.
• Easy access: All in one app, no extra wallets needed.
• Growth potential: As more networks integrate, APY might rise.

Data from industry reports shows only about 1.5% of BTC is actively used today. Features like this aim to change that, potentially activating trillions in value.

But it’s not all upside. Low initial yields and undisclosed risks, like fee structures or regional limits, mean users must weigh if the returns justify the effort.

Risks and What Users Should Watch For

Yields sound great, but details matter. Ledger hasn’t shared expected APY ranges, risk profiles, or exact fees yet. Converting to LBTC might expose users to smart contract vulnerabilities, even if self-custody stays intact.

Market watchers point out that Babylon’s staking is new, with just a fraction of BTC involved so far. If issues arise, like network delays or slashes, rewards could dip further.

Users in certain countries might face access barriers due to regulations. Always check local rules before staking.

Despite these hurdles, the setup prioritizes safety. Ledger’s scale and partnerships with trusted names like Figment and Lombard add credibility. For cautious holders, this beats centralized lending platforms that have failed in the past.

The crypto world is buzzing about Ledger’s push into BTC yields, bridging the gap between secure storage and productive finance. This feature could spark a wave of innovation, making Bitcoin more than just digital gold. It empowers everyday holders to earn without compromise, potentially reshaping how we view crypto assets.