You may have seen a bit of buzz recently around the Hodlnaut platform and, while not as well known and established as competitors like Celsius/BlockFi/Nexo etc, that buzz is for good reason. If you've followed any of my other articles on similar products, you'll know that I'm a big fan of these types of products. The ability to passively grow my cryptocurrency position in a reliable and stable manner is invaluable to the everyday investor. These kinds of platforms don't require any deep knowledge of market trends, fancy chart lines or mad skills like precognition that some traders have. Instead, the formula is one of my favorite mantras:
Save a little, but save often.
What I mean is that regularly saving even smaller amounts and adding to them as often as I can, combined with interest-earning mixed accounts like those offered by Hodlnaut, make long-term crypto-funding goals very less fantasy and more inevitability. Using platforms like this (or this methodology) is not about getting rich overnight, instead they are for those who have patience. It works best with regular savings, for example I buy a small amount of BTC every month and have been doing so for the past few years. I then put the funds into a stakeholder earning account and let compound interest take care of the rest. For me this method has worked wonders, it is less stressful and in some ways less dependent on the market so I don't look at charts,
In this article, we will take an honest look at how I found myself using the Hodlnaut platform to supplement my earning/saving strategy. Remember this is not financial advice, be sure to assess whether a product is right for you before taking the plunge.
What is Hodlnaut?
Before we look at the interface, benefits or any of those juicy prices, let's start with the basics. What is Hodlnaut and how does it work?
Hodlnaut comes from the mash-up of "hodler" and "astronaut" because for those of us who hoard crypto, there's really only one place we plan to go with our funds, and that's the moon. So it makes sense that this platform chose a name that tries to convey that feeling.
The Hodlnaut platform is a centralized crypto-finance (CeFi) built around the age-old banking combination of savings and loans and effectively works as follows:
- 1.) Savers deposit cryptocurrency into Hodlnaut
- 2.) Hodlnaut grants funds to:
- Financial institution
- Decentralized protocols
- 3.) Interest income from lending is distributed:
- Earnings for savers appear as interest on deposits
- Hodlnaut takes a portion of the profits
What are the benefits?
- Hodlers offers extremely competitive prices (one of the best in the CeFi market) for the following assets: BTC, wBTC, ETH, USDC, USDT and DAI.
- Interest is paid weekly (that's why you see APY rates next to APR rates).
- No blocking of funds, savers can deposit withdrawals as needed (though withdrawal/network charges apply)
- There are no minimum deposits, which is great for regular savers, any amount will help you get started
- If you're worried the market will go down and want to switch to stablecoins, there's a built-in swap feature.
What are the risks?
- It is a trust based system, as with any bank, the funds are under Hodlnaut's control while they are deposited
- KYC (know your customer) requirements mean collecting personal data for compliance reasons
- Borrowers are likely to default on loans. Although this is mitigated by:
- 70% or less loans to value
- Strict credit rating requirements
- Legal obligations for loans
- Assets managed through Fireblocks and no hot wallets are used
- Funds are not (by default) insured against hacks while in Hodlnaut's custody
- However, iTrust insurance is available for purchase: https://www.hodlnaut.com/crypto-guides/how-to-guide-for-buying-nexus-mutual-custody-cover-through-itrust
My experience (so far)
Setup: Although there were KYC requirements that delayed my setup by a few days (as it was a weekend when I submitted the information), the setup was pretty easy and straightforward. Probably 10-15 minutes of my time and then some waiting time.
Deposit: I started with a deposit of 0.03 BTC to test how things go, and since this was over $ 1000, I immediately received a signup bonus ($ 20 of BTC). I'll be honest, it's a little steep for a beginner, although referral programs have a lot of positives when you refer someone, as you get 10% commission for their lifetime interest, I believe.
Interface: The overall interface was easy to navigate and I really like that you can "interest in watching" in real time. The profit increased and then every week you received an email notifying you when the earnings were deposited into your account. I also like that the platform is available in both a web app and a mobile app, and offers the usual security enhancements of 2FA along with facial recognition with your phone.
Swaps: In addition to the basics, I was also able to test the swap functionality via the demo site https://app.hodlnaut.com/demo . I think this is a really important tool as it allows savers with some market awareness to play the trading game on the side. Although I wouldn't recommend using this as your main trading platform (due to the inability to set limit orders, stop-loss, etc.), it's handy if you see the market going down and want to put your funds in in stable coins for a while to ride out the storm.
Earnings: I found it useful to be able to see the winnings before they were deposited. The ability to individually set payout preferences is also a nice feature, meaning if you plan to do a bit of swap trading, you can set the stable to payout in BTC or ETH to keep that as your main source of interest.
Overall, my first test (about a month) of Hodlnaut was great, the platform is smooth and easy to use. There is only an emphasis on the big daddy cryptocurrencies BTC and ETH and some stablecoins, although I'm sure they will probably stack this with others in time. The interest rates are really attractive and the main selling point is one of the best available in the market right now (outside of DeFi). Honestly, I don't like that insurance is an extra option that users have to pay for, but on a risk-reward scale, they increase the reward if you're willing to take the risk. I strongly recommend that people take out the insurance if you have a significant deposit with them.
You can try it yourself: http://hodlnaut.com/
If you want to try it and support Publish0x at the same time, then how about using the above referral link. This is not my referral but I was the one I used to sign up and it belongs to the Publish0x team so all bonus earnings go directly to them, it's the easiest way to give back to the platform we all know and love .
Thank you very much for reading, I hope you found the article interesting and will explore what Hodlnaut has to offer, good luck everyone!