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Recently, I set up a crypto interest-earning account with Hodlnaut. If you are familiar with the crypto lending platforms, you will have heard of its competitors, BlockFi and Celsius. Unlike Hodlnaut, BlockFi offers one free withdrawal every month whereas Celsisu does not even charge any withdrawal fees. On the other hand, Hodlnaut requires a transaction fee amounting to 0.0004 BTC and 0.005 ETH for these two popular cryptocurrencies respectively. Why did I open my account with Hodlnaut then?
Homeground Advantage
Here, I need to confess that I'm Singaporean and feel a greater sense of connectedness to Hodlnaut because it is a Singapore start-up. There's a part of me that wishes to see local start-ups succeed. If you look at its history here, I think it's quite amazing how the company has grown to a staff strength of 20 just within 20 years. It offers a lot of potential, which energizes me.
Psychological Safety
Of course, the desire to support local enterprises will count for nothing if Hodlnaut does not have rigorous processes and structures to safeguard my crypto deposits. I liked how Hodlnaut underwent a Financial Attestation with Crown Singapore - one of the top 8 global audit firms - and passed it with flying colors. Moreoever, it was also certified by Singapore Fintech Association, which is recognized by the Monetary Authority of Singapore (MAS). Most importantly, I understood that Hodlnaut is currently in the process of applying for an official license with MAS under the Major Payment Institution license. Now, the Singapore government recently warned its citizens to exercise extreme caution when trading cryptocurrencies due to the volatile nature of digital assets, so if Hodlnaut were to successfully attain a license, then this icing on the cake further validates its strict compliance with regulations. Already, it has received an exemption from MAS to provide its services in Singapore.
High Interest Rates
Hodlnaut is not a trading platform for the buying and selling of cryptocurrencies, so in a sense, parking my crypto eases my mind. There's the withdrawal fee to take into account, no doubt but at the same time, Hodlnaut offers higher interest rates than those of BlockFi and Celsius. Take ETH for example, Hodlnaut offers 6.7% APY; BlockFi offers 4.5% APY; and Celsius offers 3.51%. I think Hodlnaut suits my needs the best because I am intending to hodl my crypto for the long term. So in a way, the high interest rates compensates for its withdrawal fee. I also like how interest is accured every day and subsequently deposited to my account every Monday. Doesn't it offer a great sense of satisfaction watching your crypto pool grow incrementally week after week?
If you check out its FAQs, Hodlnaut lends out cryptocurrencies to established and vetted financial institutions. To minimize the risk of defaulting by corporate borrowers, it also lends out to more than one counterparty so that our assets are safeguarded.
I did subsequently email the staff to ask how Hodlnaut will safeguard such lucrative interest rates in the midst of volatile market conditions (especially when the price of Bitcoin plunges drastically). He wrote back to say that the company is working hard to ensure its competitive rates and has no plans to change these rates for now. He elaborated to inform me that while there might come a time when Hodlnaut has to adjust its rates, the time is not now. Well, I was happy enough with his answer.
Insurance Coverage
I have not looked into this yet because the amount of ETH I hold is embarrassingly pathetic, but when my portfolio grows, I will be sure to look into getting insurance coverage with Nexus Mutual's Hodlnaut Custody Cover smart contract at a 2.6% premium. Perhaps this is what you can look into as well.
Word of Warning
This is the thought process I went through before opening up my account with Hodlnaut. This certainly does not qualify as financial advice, just my user experience. Please do your due diligence and assess your risk appetite to ascetain whether Hodlnaut is the right product for you. :)
You may want to sign up an account with Hodlanut using my referral link. You will get a US$20 signup bonus if you make an initial deposit equivalent of US$1000 on any of the 5 supported assets - BTC, ETH, DAI, USDT and USDC.???
