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Hodlnaut Review: What You Need to Know

Cryptocurrency lending and borrowing services are the way of the future, and Hodlnaut is at the forefront of that. Here is your Hodlnaut review.

  • Hodlnaut
  • Dean Fankhauser
    By
  • Posted
  • Bitcompare score
  • Go to siteHodlnaut

Our take

3.0
Bitcompare score

Are you interested in investing in Bitcoin but don't know where to start? If so, you're far from alone. There are more than 40 million crypto users today, and the value of popular coins such as Bitcoin keeps growing. 

Bitcoin accounts for more than $6 billion in daily digital transactions, having gained more than 193,639.36% since 2012. Right now, the total crypto market cap is $234.64 billion

Crypto borrowing and lending services will continue to expand in the future, which means it's time to get in on a piece of the action. In this Hodlnaut review, we'll take a look at one platform that's helping consumers delve into digital currency dealings for the first time. 

What Is Hodlnaut? 

Founded in 2019 by Juntao Zhu and Simon Lee, the Hodlnaut platform represents an up-and-coming crypto platform headquartered in Singapore. It makes up one part of the larger Antler portfolio company. Since its opening, Hodlnaut has skyrocketed to a position as one of the fastest-growing CeFi platforms in the region.

How did the company come by its name? It's an amalgamation of two terms, "HODL" and "astronaut." 

What's HODLing? This slang term used by crypto enthusiasts refers to the strategy of holding crypto assets instead of selling them. In other words, Hodlnaut promises to help you skyrocket the value of the cryptocurrencies you own.

Hodlnaut Versus the Competition

What sets this platform apart from the competition? It facilitates earning interest on crypto holdings, much like dividend-paying stock investments. In other words, you receive interest over time trading on margin. 

Unlike more traditional options such as CDs, you can take out funds at any time. And you can earn up to 8.3% on crypto holdings. That's with no lock-in periods or minimum deposits. 

The platform now supports crypto trading through its brand new Token Swap feature. Token Swap permits users to trade between any of the brand's supported assets within the larger Hodlnaut platform. 

The company's goal remains to help investors unlock their full interest-earning potential and the opportunities that come with it. This vision includes finding ways to help HODLers earn consistent income. 

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  • Return rates optimized daily
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Services Offered by Hodlnaut

Ultimately, Hodlnaut offers interest on digital currency deposits. These deposits then get loaned out to vetted institutions. The company also lends to decentralized protocols, permitting customers to earn interest on their assets. 

Which currencies does Hodlnaut support? They include:

  • Bitcoin (BTC)
  • Dai (DAI)
  • USD Coin (USDC)
  • Tether (USDT)
  • Ethereum (ETH)

No minimum deposits are required, and you can withdraw funds without restrictions on timing or fund amount. In the process, interest earnings on the platform range from 6.2 to 8.3%, depending on the currency selected. 

How are these rates determined? Based on two factors:

  1. The performance of a previous month's currency
  2. The demand for that currency

Interest gets credited to HODLer accounts every Monday calculated in terms of daily earnings. 

Institutional clients may also receive access to digital asset loans through Hodlnaut. In these cases, the platform acts as the counterparty for institutional loans, with borrowing commencing at $50,000.

Loans have minimum three-month terms, and loan-to-value (LTV) terms come in at between 25 and 100%. 

Hodlnaut Customer Service

How does Holdnaut compare to the competition in terms of customer service? Like many other digital asset platforms on the market today, you'll need to contact the company via email with questions and issues.

For those living in the US, allow extra response time as the company operates on Singapore Time. Operating hours are Monday through Friday from 10 am to 7 pm.

While you shouldn't expect an immediate resolution to a problem you email to the company, urgency isn't typically a factor when it comes to long-term interest earnings.

Fees Associated With Hodlnaut

Many customers also have questions about the fees associated with using various platforms. What can you expect from Hodlnaut? The company doesn't charge any fees on deposits.

But you should expect withdrawal fees based on the type of currency in use. As of the writing of this article, withdrawal fees are as follows:

  • Bitcoin (BTC): 0.0005 BTC
  • Dai (DAI): 3 DAI
  • USD Coin (USDC): 3 USDC
  • Tether (USDT): 2 USDT
  • Ethereum (ETH): 0.005 ETH

What else do you need to know about Hodlnaut? Let's briefly explore the process of opening an account. As you'll see, it's easier than you think.

How to Open a Hodlnaut Account

To open an account with Holdnaut, head to the company's website. There, you'll need to complete some rudimentary paperwork. Go through the Know Your Customer (KYC) verification process if you want access to all account features. 

Why the need for KYC verification? It falls under the massive Anti-Money Laundering (AML) policy umbrella, ensuring each customer's identity, risks, and suitability. 

Although KYC verification procedures were initially only initiated by traditional lending institutions, they've become increasingly common within the fintech industry. 

Are you interested in learning more about KYC policies before signing up with a crypto platform? Check out this complete breakdown of the rules

How Safe Is Hodlnaut?

Many potential crypto investors also have concerns when it comes to the safety of various platforms. How does Hodlnaut square up to the competition in this area? The same rules govern this Asian fintech company as other financial institutions in Singapore. 

What do you need to know about the differences between Singaporean and American financial regulations? In the US, deposit accounts enjoy FDIC protection. Let's go over a brief summary of what the FDIC is and what it does for consumers. 

FDIC Protection

Formed in 1933 as part of the Banking Act, the FDIC represents a safeguard for your money should a bank where you've placed your funds experience financial difficulty. 

Which funds get insured through the FDIC? They include:

  • Savings accounts
  • Checking accounts
  • Time deposits (e.g. CDs)
  • Money orders, cashier's checks, and other official items issued by a bank
  • Negotiable order of withdrawal (NOW) accounts

Standard insurance through the FDIC provides coverage of up to $250,000 per depositor, per ownership category, per FDIC-insured bank. This limit proves applicable to all deposits owned by an account holder. You can read more about FDIC protection here

SIPC Protection

Will you enjoy these same protections when opening an account through Hodlnaut? The simple answer is no.

What's more, your account won't fall under the protections afforded by the non-profit corporation, the Securities Investor Protection Corporation (SIPC), either. You can learn more about SPIC here

Hodlnaut Platform Security

Now that you have a better understanding of protections not available with Holdnaut, let's take a look at the precautions the company has implemented to protect customer funds.

Holdnaut platform security is founded around SSL-encrypted traffic and runs on Amazon Web Services (AWS). AWS represents a secure cloud infrastructure.

What's more, all cryptocurrencies held in custody with Hodlnaut go into cold storage. No hot wallets get used, ever. 

Customers may purchase additional insurance through Nexus Mutual to mitigate hacking risks. But Holdnaut doesn't foot the bill for these policies.

If you find that Holdnaut's the product for you, consider purchasing insurance through a smart contract such as Nexus Mutual’s Hodlnaut Custody Cover. You'll gain access to coverage of up to $36 million and a premium of 2.6% per annum.

Understand Counterparty Risk

Companies that rely on institutional lending through Hodlnaut could default on their loans, and this is a reality you need to bear in mind. As a result, Hodlnaut must ensure the credibility and risk profile of the institutions borrowing from them.

They must guarantee that the companies to which they lend prove both solvent and legitimate enough to pay off debts. For these reasons, Hodlnaut remains selective about the institutions to whom they lend.

To reduce the risk of loan defaults, Hodlnaut vets companies based on credit scores. Then, the company collateralizes agreements accordingly. 

The company discloses information on the precise collateralization ratio, 130%, they require, which bodes well for transparency. But Hodlnaut doesn't disclose the credit scores of the companies to which they lend.

Indeed, the platform can decrease risk by diversifying the companies they work with. But lack of specific credit score information may prove off-putting to some consumers. 

Security of Hodlnaut's Underlying Assets

The diverse assets Hodlnaut lends all prove subject to specific risks. For example, currencies like Ethereum and Bitcoin have a history of volatility and often experience significant value discrepancies throughout a given loan's term.

What about other coins such as Dai, USDT, and USDC? These stable coins provide the added protection of being pegged to the US dollar. On the flip side, unique risk factors influence the value of these coins, especially concerning their ability to hold a dollar-derived value.

Changes in Restrictions Over Time

What else do you need to know about the security of your funds with Hodlnaut? By their very nature, cryptocurrency platforms are prone to change related to evolving restrictions in various localities worldwide.

While Singapore remains welcoming to cryptocurrencies and other digital assets, you can't say the same about other nations. Understand that Hodlnaut falls under Singaporean law.

For example, the platform remains subject to the Payment Services Act of January 2020. This legislation covers cryptocurrencies classified as "digital payment tokens."

Hodlnaut Ease of Use

Hodlnaut’s platform appears straightforward and user-friendly on the first impression. Users can check overviews of their transaction history and assets balance in their dashboard quickly and easily.

The dashboard also allows for streamlined withdrawals and deposits. And you can check interest statements without a lot of fanfare. 

If you're so inclined, you can create and share a unique referral link, effortlessly keeping tabs on how many friends you’ve referred and the payouts you've received. Of course, this feature doesn't entice all customers, but we've found it handy and helpful. 

Because Hodlnaut represents a subsection of Antler’s portfolio company, it relies on the stability and support of this global firm, which provides backing to early-stage startups. Hodlnaut continues to gear up more features and has big plans for the future as its recent launch of Token Swap demonstrates.

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USDCHodlnaut3.510.5%Go to site
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Pros and Cons of Hodlnaut

Pros

  • One of the highest interest rates of return for Bitcoin
  • No lock-in periods
  • Funds being stored securely in BitGo Secure Wallets
  • Signup is fast
  • No minimum deposit needed
  • Ability to withdraw funds at anytime
  • Predictable weekly payouts on daily interest earnings each Monday
  • Dedicated customer support and a TrustPilot rating of 4.3

Cons

  • Having only five asset classes to date
  • Withdrawals and KYCs are manually processed
  • No mobile applications available yet
  • Limited features
  • The necessity of setting aside profits to cover potential losses

Hodlnaut Review: Frequently Asked Questions (FAQs)

There are many frequently asked questions regarding Hodlnaut. These include questions related to security, how Hodlnaut makes money, whether there are any restrictions, and how interest is paid out to you. Let’s review these questions now

How Does Hodlnaut Make Money?

When Hodlnaut builds up the interest of your cryptocurrency investments, they lend these assets to vetted and established financial institutions. Then, when they get the money back, they keep a small amount of the earned interest. The rest goes to you.

Are There Restrictions?

When it comes to how much you can deposit in your Hodlnaut account, there aren’t any restrictions. Put in whatever amount you want and you can start earning interest fast. However, withdrawals are limited. You can only take out 100 BTC every 24 hours.

How Is Interest Paid Out?

When you earn interest, Hodlnaut immediately deposits it into your account. Accrual occurs at the end of each day. However, be aware that your account will only be credited at the end of each month, so you should plan your financing accordingly.

Hodlnaut: A Solid Lending Platform with Potential

What's our final conclusion when it comes to our Hodlnaut review? This solid, albeit new, player in the crypto game boasts plenty of potential. But we'll have to wait and see if the company can deliver on its loftiest promises. 

We recommend researching the platform thoroughly (along with other crypto borrowing brands) before signing up or starting to invest. After all, certain platforms will better meet your needs than others.

Nevertheless, Hodlnaut's focus on providing users with a sizable 6.2 percent APY on Bitcoin may prove too compelling to resist. Compare that to Blockfi's offering of 0.5 percent for those with 20 Bitcoin (BTC) or more, and you can see why.

Are you ready to explore other cryptocurrency lending platforms to see how they stack up against Hodlnaut? Explore our wide selection of lending platform reviews.

Our Hodlnaut score

3.0
Bitcompare score
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