Hodlnaut is a Singapore-based cryptocurrency interest account platform that offers compound interest of 10% for stablecoin assets and 6% for Bitcoin.
If you are just entering your crypto interest account search, welcome to a world where cryptocurrency holders can automatically and passively accrue interest on their digital assets.
Hodlnaut is a relative newcomer to the cryptocurrency interest account block, but it offers some of the industry’s more competitive rates.
So, you may be wondering, is Hodlnaut legit? It’s a newer platform with a smaller team with less funding than industry pioneers BlockFi and Celsius. Yet, it’s in the conversation as a top cryptocurrency interest account platform.
The following Hodlnaut review examines its interest account product, security practices, usability, team community trust, as well as an exclusive interview with a representative from the Hodlnaut team.
Let’s dig in.
Hodlnaut is a Singapore-based company founded in 2019. It is available worldwide, excluding locations prohibited by Hodlnaut Policy or Sanction Laws.
Holdnaut derives its name from the crypto slang HODL (Hold On for Dear Life), which is an enthusiastic expression that refers to keeping your digital assets rather than selling them, regardless of the volatility of the market. The latter part of the company name is in the motif of “astronaut.”
The platform has accumulated about $250M in assets under its management from over 5,000 users, according to its site.
Hodlnaut has raised about $100,000 in funding from one pre-seed funding round with Antler, a Singaporean startup accelerator and venture capitalist firm.
This is distinctly different from platforms like BlockFi, which has raised north of $500M. That being said, Hodlnaut seems to have narrowed down on a similar business model, just with drastically less funding necessary.
There is no minimum balance to qualify for crypto interest. Hodlnaut offers:
Signing up for Hodlnaut is a fairly straightforward process, with the typical KYC requirements.
CoinCentral readers can get a $20 sign-up bonus when they deposit a minimum of $1,000 on Hodlnaut.
Zhu spent over three years as an analyst and developer with the Swiss wealth management firm Credit Suisse.
Lee spent over three years in engineering management roles. The two founders hold a combined nine years of experience in software development, finance, and engineering.
Hodlnaut supports six cryptocurrencies: BTC, ETH, DAI, USDC, USDT, and WBTC, offering between 6.2% and 10.5% APY.
Although the number of assets it supports is much less than other crypto interest accounts (Gemini or Celsius support over 30+ tokens, Hodlnaut still offers very competitive rates with no minimum balances or rate caps.
“We just added support for WBTC recently, where users can also wrap and unwrap their Bitcoin using our token swap feature,” says CEO Juntao Zhu. “We’ve played with the idea of adding BNB and also DOGE as well but nothing is planned yet as we’re focusing on other feature launches such as peer-to-peer fiat on-ramp, and getting our mobile apps out.”
Hodnaut’s rate beat both Celsius and BlockFi for stablecoins by about 2% APY.
Users may also enjoy the fact that Hodlnaut doesn’t cap rates. For example, competitor BlockFi reduces its rates on BTC from 4% to 1.5% after 0.25 BTC, whereas Hodlnaut offers 6.2% regardless of the amount.
So, it’s a newer platform, but it offers better rates than its more established competitors– with a smaller team and less funding. How does it pull this off?
Like most other crypto interest accounts, Hodlnaut uses your assets as collateral to offer loans to corporate creditors, earning off the difference between the interest it pays users and what it charges to offer loans to its institutional borrowers.
“We have incredibly stringent capital requirements in place of our counterparties,” comments Zhu. “In any case, we’re very selective with whom we lend to. We only lend to corporate entities with good credit scores and we will verify this with them during the onboarding process, and the Loan-to-Value (LTV) Ratio of our loans is usually 70% or lower.”
The platform also makes money by earning interest from lending its assets to decentralized protocols.
Hodlnaut is based in Singapore, a fact that tends to introduce some unfamiliarity to a U.S. audience.
For one, no digital assets in any cryptocurrency interest account are FDIC insured, so one of the main protections for U.S. depositors is completely absent from this industry at large. Singapore also does not offer FDIC-equivalent federal protection for cryptocurrency accounts.
Your funds on Hodlnaut, or any cryptocurrency platform, are never entirely risk-free.
However, Hodlnaut takes some steps to mitigate this risk.
The platform requires that you set up 2FA before you can make a withdrawal, which helps keep accounts secure and prevent unauthorized withdrawals. Hodlnaut uses industry-standard encryption and other safety regulations to ensure that assets and information on its platform are protected.
As of this writing, Hodlnaut has never been hacked.
Hodlnaut’s primary custodian is Fireblocks, a leading digital asset custody solution that employs various methods to ensure the safety of assets. Fireblocks holds assets in a mix of offline cold storage and insured hot wallets; all user deposits are never in the same place at once.
Hodlnaut gives you the option of purchasing insurance on your crypto via a partnership with European company Nexus Mutual.
That’s big, especially in the crypto interest space were deployed or loaned assets are often uninsured if they’re kept in hot wallets. Since these platforms are constantly lending and receiving deposits, the funds are in motion, which makes them very difficult to insure. The Hodlnaut insurance with Nexus currently stands at $22 million and is anticipated to grow as both companies gain traction.
Hodlnaut outlines its procedures in the case of a borrower default.
Hodlnaut is certified by the Singapore Fintech Association, which is recognized by the Monetary Authority of Singapore. However, at the time of this writing Hodlnaut is undergoing a license application, and aims to become the first regulated entity in Singapore’s crypto borrowing and lending space.
With over $250M in AUM, Hodlnaut will inevitably need to demonstrate explicit certification in its ability to be responsible with user funds. As the platform continues to grow, it’s likely we will see more developments in this area.
The platform is currently accessible only on web and intends to release an IOS application in mid-2021.
Reddit reviews of Hodlnaut tend to skew positive for customer support, citing the promptness of the team as a distinct advantage. Hodlnaut support can be reached via a support ticket or at email@example.com.
Hodlnaut maintains an FAQ section on its website for the lower-hanging fruit.
Overall, Hodlnaut offers a pretty competitive product in an increasingly competitive industry.
On one hand, Hodlnaut is a fairly new company with a single bootstrapped fundraise based in Singapore. This is a drastically different proposition than U.S.-based companies like Celsius and BlockFi, which have established themselves as the blue-chip of CeFi. That being said, Hodlnaut’s business model doesn’t seem inherently riskier than any other crypto interest account provider.
However, some users may find value in the scrappiness and nimbleness of a newer more light-footed team. As the learning curve for DeFi becomes gradually less steep, platforms like Hodlnaut are positioned to take on challenges that their more regulated and established competitors may not be able to. This can be advantageous provided your funds are safe on Hodlnaut, which the limited time span we have available indicates they are.
If your research simply comes down to APY, Hodlnaut offers industry-leading rates (6.2% on BTC, 6.7% on ETH, and 10.2% on stablecoins). It offers above-average customer support and has been proactive towards insuring assets, even when they’re deployed.
Hodlnaut also supports coin-to-coin trades and unlimited withdrawals at any time (at a fee).
At this writing, the platform only supports six tokens and is only available via the web, but we’re interested to see how Hodlnaut evolves.
CoinCentral readers can get $20 dollar equivalent as a signup bonus on your first deposit of $1000 or more.