Essay
Why we will never rehypothecate a client coin
Rehypothecation means lending out collateral you were given as security. It makes the numbers look better until the day everyone asks for their coins back at once.
Every cycle in Bitcoin has ended the same way for desks that did it. Coins that were supposed to be in one place turned out to be promised in three.
Ballast earns yield only from fully collateralised lending and covered calls. Collateral we receive is never lent on, and we never lend a coin we cannot recall inside a day.
It means we earn less in good markets. It also means the coins are there in bad ones, which is the only time a treasury is really tested.