As Bitcoin trades above $51,000 after yet another rollercoaster of a week of extreme volatility, events in the crypto world are once again dominating the global financial news.
The extreme volatility in crypto isn’t for the faint-hearted trader. However, buying and selling crypto isn’t the only way to make money from your cryptocurrency. For those not content to just hodl their digital currencies, and wait patiently (and expectantly) for their crypto to appreciate, there is an alternative way to earn money from your crypto that gained a lot of traction in 2020 and looks set to grow exponentially in 2021. We are talking about a central part of DeFi – crypto lending.
Decentralized Finance (DeFi) has emerged as a viable challenge to traditional finance as we know it. The peer-to-peer opportunities in Finance are endless and with a crypto lending platform like Holdnaut, crypto investors now have the opportunity to just preserve the value of their crypto holdings but also to earn interest while doing so.
According to industry site DeFi Pulse, crypto lending on platforms such as Holdnaut, has risen more than seven-fold since March to $3.7 billion, as smart search for returns at a time when central banks globally have slashed interest rates to prop up economies impacted by the coronavirus pandemic. So, what is Holdnaut and how does it work?
Based in Singapore, a key hub in Asia with its welcoming attitude towards emerging technologies such as cryptocurrencies and blockchain, Hodlnaut is a financial services platform that was launched in April 2019 by self-described bitcoin maximalists Juntao Zhu and Simon Lee.
Licensed and regulated by the Monetary Authority of Singapore (MAS), and certified by the Singapore Fintech Association, Hodlnaut is a blockchain company recognized by the Infocomm Media Development Authority (IMDA) of Singapore. The company is backed by some of Asia’s leading companies, including BitGo, Three Arrows Capital, Sparrow, and Singapore Management University. Singapore, as a nation took the proactive approach to cryptocurrencies by introducing the Payment Services Act (PS Act) ensuring all intermediaries dealing with certain cryptocurrencies are regulated, with a particular focus on consumer protection and anti-money laundering. The security that Singaporean crypto companies like Holdnaut (license found here) have turned out to be the springboard for their success.
The Hodlnaut platform provides financial services for individual investors who earn interest in their cryptocurrencies by lending them to margin traders. Hodlnaut is able to offer competitive interest rates to individual investors with a Hodlnaut Interest Account by lending it to highly-vetted margin traders as crypto loans.
Although there is always an element of risk involved in crypto lending or any sort of lending for that matter, Hodlnaut has incredibly strict capital requirements of their counterparties, which means it only lends to funds to those that have a mandate to borrow less than 1 x their Net Asset Value.
Hodlnaut offers competitive interest rates (up to 8.3% APY on 5 assets class) to individual investors with a Hodlnaut Interest Account. The current rates according to their website as of Feb 25th 2021 are:
- Bitcoin (BTC) – 6.2%
- Ethereum (ETH)- 6.7%
- DAI – 8.3%
- USDC – 8.3%
- USDT – 8.3%
.Although only five asset classes at the moment, this offers stability that may not be found in having too many and not the right kind of assets. There are no lock-in periods or minimum deposits meaning you can withdraw and deposit at any time with payouts made to your wallet on a weekly basis.
With over 1000 registered users and more than $100 million in assets, earlier this year, Holdnaut undertook an independent verification exercise performed by Crowe Singapore, a global audit firm, to verify the ownership of Hodlnaut’s cryptographic assets amounting to US$106,071,264.87.
Juntao Zhu, CEO, and Co-founder of Hodlnaut said:
“With this independent verification exercise, we’re hoping to provide transparency of our assets under management to our users on a periodic basis,”
“This is the first step towards engaging an external auditor at a later stage, which is mandatory as part of the requirements of the PSA under the Monetary Authority of Singapore.”
Crypto lending may still seem to be in its early stages, but it is fast becoming a viable method for individuals to be able to get comparatively attractive interest rates on their crypto holdings. Hodlnaut, part of Antler’s portfolio company, a global VC firm backing early-stage startups, offers a safe, easy and attractive option to earn substantial bitcoin interest while HODL-ing and whilst global negative interest rates are a reality. See what the fuss is about for yourself – https://www.hodlnaut.com/
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