Good question! The way that the returns are generated in Atomic is fundamentally different from how Ledn does it.

When you lend with Ledn, you give them custody of your coins and they lend your coins out to market makers, trading firms etc. These firms then take your coins and use it for whatever their intended purpose is - levered trading, marketing making liquidity, maybe even wrapping it into wBTC and participating in DeFi etc.

With that - there's counterparty risk. The guys Ledn lent your coins to -- you need to trust them to not screw up. Hopefully they're not the next Alameda Research. Hopefully they don't get liquidated on their trade that they used your coins as collateral for. Hopefully opefully they didn't convert your coins to wBTC that they then deployed on a ETH DeFI platform that then gets hacked.

To your question, why does Ledn offer just 1% - because Ledn's yield comes from the interest rate that these borrowers pay. Currently there's not a ton of demand from borrowing BTC- so interest rates in the market are likely low, and Leon's rates reflect that.

With Atomic, returns are generated through selling covered calls - not lending. There's still some risk involved, there's not free lunch in BTC after all. but it's a very different risk profile. It's no longer a complete black box risk - where you gotta hope Ledn lends to the right ppl. It's no longer a situation where you're essentially risking 100% of your BTC for a few basis points of yield.

I chat more about the risk/reward tradeoff with Atomic here: #207400_