If you are looking into putting your cryptocurrency to work, crypto lenders are a good place to start. You can either earn interest on your crypto holdings or borrow against your digital assets without selling them. Hodlnaut and BlockFi are two such options, but what does each one have to offer you? Let’s see!
The Intro
Founded in 2017, the New Jersey headquartered BlockFi is a well-known crypto lender which gained a $3 billion valuation after completing its $350 million Series D round early in 2021.
This company has also filed for a fund called “BlockFi Bitcoin Strategy ETF” that would invest in Bitcoin through futures contracts traded on the regulated derivatives exchange CME.
Currently, the crypto lender is under the scrutiny of regulators in different states, including Texas, Alabama, Kentucky, New Jersey, and Vermont. BlockFi maintains that it has been in “active dialogue” with respective regulators and that they are “lawful and appropriate for crypto market participants.”
The US Securities and Exchange Commission (SEC) was also scrutinizing BlockFi over its yield generating account. But in February 2022, BlockFi had a $100 million settlement with the SEC and said it will register its new crypto lending product, called BlockFi Yield, with the agency.
Still, , which was founded by CEO Zac Prince and SVP of Operations Flori Marquez, boasts of more than 1 million clients and holds over $10 billion in assets.
, on the other hand, is a Singapore-based platform that was founded in 2019 by Bitcoin maximalists Juntao Zhu and Simon Lee. The company has more than $500 million in assets under management (AUM) with over a 20% month-on-month growth average.Recently, it partnered with the popular crypto hardware tech firm, Ledger, to launch the limited-edition co-branded Ledger Nano S for its users.
Hodlnaut is currently working on auto swaps, or scheduled swaps feature as well as portfolio management. Interestingly, Hodlnaut also allows its users to vote on the features they would love to see next on the platform.
Products
Now, let’s take a look at what these cryptocurrency platforms have to offer you.
Interest-bearing accounts
The BlockFi Interest Account (BIA) is an interest-bearing account, which offers yields to crypto investors who store their crypto at BlockFi. The interest on your holdings begins accruing the day after you deposit, and you are paid monthly compounding interest.
BlockFi has a tiered rating and is offering 7.25% on your stablecoins like USDT, USDC, DAI, and PAX. As for crypto assets, the rate earned goes down severely the more cryptocurrency you deposit. This interest rate further fluctuates with market values.
Interest on your account accrues daily here and is added to your account monthly. The Interest Payment Flex option meanwhile lets you choose the currency your interest is paid in.
The company also allows you to set up a business or corporate account that functions the same way as an individual BlockFi Interest Account. Besides the name, the difference is that it requires additional documentation and a longer verification process.
BlockFi also features ‘refer a friend’ under which every person that signs up using your referral code and deposits $100 or more into their BlockFi Interest Account (BIA), both you and that friend each earn $10 in BTC.
BlockFi Interest Accounts (BIAs) are not registered under the Securities Act of 1933, as such not offered or sold in the United States anymore. Their existing BIA clients in the U.S. are still receiving interest payments, but they cannot add more crypto to their accounts. However, once the registration process of BlockFi Yield is completed, those accounts will automatically roll over into the new product.
In comparison to 23 cryptocurrencies supported by BlockFi, Hodlnaut has a limited 8 crypto assets Bitcoin (BTC), Ethereum (ETH), Wrapped Bitcoin (WBTC), USDT, USDC, and DAI, available on its platform.
On Hodlnaut Interest Account, you can earn as much as 5.3% APY on 0.5 Bitcoin, which comes down on as the amount of Bitcoin deposits goes up. Also, there are no minimum deposits or lock-in periods, and interest is paid out weekly, every Monday.
Not just Bitcoin, but on stablecoins USDT and USDC as well Hodlnaut offers much higher interest, as much as 13.900000000000002% APY.
Hodlnaut also offers the Fixed-Term Deposit option where the minimum lock-in period is 28 days, and the lowest you can earn is 3% on BTC while the highest you can earn is 7.50% on USDT for the same time period, which increases to 3.55% and over 8% respectively for a 180-day period.
Much like BlockFi, also has a referral program, under which for every person that signs up using your referral link and deposits crypto into their Hodlnaut Crypto Interest Account, you receive a 10% commission from your friends’ interest and each friend referred gets a $20 signup bonus if they deposit $1000.
Crypto-backed loans
Instead of selling your crypto when you need cash, borrow funds against your crypto assets on these platforms with low-interest rates.
On , you can borrow as much as 50% of the value of your crypto collateral at an interest rate of 9.75%. You get an even lower rate of 4.5% but for that loan-to-value (LTV) ratio is 20%. The loan origination fee meanwhile remains constant at 2%. You can then use your crypto-backed loan to buy different assets.
In the event the value of your collateral decreases significantly, you get a margin call that requires you to add more collateral to your account. If no action is taken within three days of that, BlockFi can liquidate your position at its sole discretion.
When it comes to Hodlnaut, loans on the platform start from $50,000. The platform offers a flexible LTV ratio in the range of 25%-100% but containing a credit line using your crypto assets as collateral is only for institutional investors and not available to individual investors.
To get started on this platform, you have to sign up for an account and go through the mandatory KYC (Know-Your-Customer) verification process.
Additional products
Hodlnaut’s product range also covers token swaps that allow you to exchange any of the supported assets on the platform seamlessly at zero fees. It enables you to manage your portfolio and rebalance asset holdings anytime. To swap assets, just log in to your Hodlnaut account, choose the token you would like to trade, review the quote, and place your order.
The good thing is you can start earning interest on your crypto assets on the same day that you execute your swap order.
has a much wider range of products available for its users, including a trading service for you to buy, sell, and trade over 15 crypto assets like BTC, ETH, ADA, and SOL. Also, you can buy crypto instantly using your bank account via ACH, and for as little as $20.Bitcoin Wallet is another product. You can create your account for free and instantly start trading with no balance requirement either. However, it is not an interest-earning account but only used to buy, trade, sell, and hold crypto, as well as store your BlockFi credit card rewards.
In partnership with Visa, the company launched BlockFi Rewards Visa Signature Credit Card. Every purchase made on this card earns you 1.5% back in crypto. In the first three months, you can earn 3.5% back and 2% on every purchase over $50,000 of annual spend. There are no annual or foreign transaction fees here.
BlockFi also caters to institutional customers, offering them a full suite of prime capabilities across lending and trading, as well as Bitcoin Trust, Ethereum Trust, and Litecoin Trust to accredited investors. Miners, exchanges, and ATMs can also borrow USD or crypto to fund their business.
Fees
On , there is no minimum amount to deposit or withdraw. Depositing crypto on the platform won’t cost you any fees either. However, when withdrawing crypto, you have to pay a fee that is different for each asset, such as 0.0004 BTC, 0.0036 ETH, 10 USDT, 10 USDC, and 10 DAI.
BlockFi users, meanwhile, are free to make one crypto and one stablecoin withdrawal per month. Beyond this, the fees vary by each virtual currency, such as 0.00075 BTC, 0.001 LTC, 0.015 ETH, 2 LINK, 0.035 PAXG, 2.5 UNI, 60 BAT per withdrawal. Meanwhile, withdrawing stablecoins GUSD, USDC, BUSD, PAX, DAI, USDT will cost you $50.
Security
Coming on to the security part, Hodlnaut has partnered with enterprise-grade platform Fireblocks for its multi-layer security technology that provides a secure infrastructure for issuing, storing, and moving digital assets.
In early 2021, Hodlnaut further underwent a financial attestation performed by Crowe Singapore. Last year, the crypto lender also committed about $1 billion of its equity to become a member of Nexus Mutual, a decentralized insurance provider, to make insurance affordable for its users. With this,
Hodlnaut users now insure their funds on the platform at a premium of 2.6% p.a. The insurance funds are claimable in two cases; when Hodlnaut gets hacked and your losses are more than 10% of funds or when withdrawals are halted for more than 90 days from the platform.
As for , it keeps its reserves with third parties, including Gemini, BitGo, and Coinbase. While your funds on the platform are not insured by the FDIC or SPIC, BlockFi has a feature called allowlisting. This self-service security feature is to ensure that crypto in your account can only be sent to known withdrawal addresses. It also allows you to ban all crypto withdrawals or restrict withdrawals to a list of known addresses only and label withdrawal addresses to make them easier to find and identify.
Compare with Hodlnaut and BlockFi alternatives
Similar Savings Accounts and Loans
| Platform | Interest Rates (APY) | |
|---|---|---|
| Nexo | Up to 7% on BTC Up to 12% on Stablecoins ... 36 more coins | |
| OKX | Up to 5% on BTC Up to 0.08% on Stablecoins ... 196 more coins | |
| YouHodler | Up to 3.05% on BTC Up to 8.33% on Stablecoins ... 56 more coins |
Conclusion
The cryptocurrency lending space is expanding just as the entire crypto industry matures. It has resulted in the introduction of several regulated and reputable crypto lenders that allow you to borrow against your crypto. Moreover, these companies offer much more attractive interest rates than traditional financial companies.
Among these companies, the US-based is working on becoming regulated and offers tiered annual interest rates, which are paid every month. Also, it gives its users only one free withdrawal each for crypto and stablecoin every month. For safe storing of your crypto, BlockFi uses Gemini as their custody provider.
There is no commission fee, monthly fees, or minimum deposits, but there are no custodial accounts either. Not to mention, there is very high APY and loan rate volatility.
In comparison, offers even higher interest rates on your crypto holdings though it only supports a handful of virtual currencies. This crypto lender also has no minimum deposit requirement but pays out the interest weekly and allows you to withdraw your funds at any time.
Much like BlockFi, the rates on Hodlnaut are also subject to monthly fluctuation. Additionally, the platform has limited features, and its crypto loans are exclusively offered to institutional investors.
As we saw, each of these platforms has its features and limitations, so you need to choose the option that serves your specific needs the best.