With traditional interest rates at historic lows, people are turning to the cryptocurrency market as an alternate means to generate additional income. A popular way to earn passive income is using a crypto interest account. A popular platform based in Singapore that offers interest baring accounts is Hodlnaut. In this review, we will assess their features, interest rates, fees and security.
UPDATE. Hodlnaut has suspended withdrawals since August 8, 2022. Do not use this platform until official communication is released from Hodlnaut. For an alternative list of exchanges to earn interest on crypto, read this article.
- High interest rates up to 6.2% on Bitcoin and 10.5% on stablecoins
- No lock-in period, no minimum deposit amount (with no fees)
- Interest is paid every week, allowing crypto profits to compound over time
- Zero deposit fees to transfer cryptocurrencies
- Optional insurance policy to safeguard assets under custody
- Regulated provider under Singaporean authorities
Hodlnaut is a financial platform based in Singapore that offers competitive interest rates of up to 6.2% for Bitcoin and 12.73% for stablecoins. There are no lock-in periods, minimum deposit amounts or fees to get started. Hodlnaut is best suited for investors that want to put their crypto to work and earn a passive income.
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What Is Hodlnaut?
Hodlnaut Pte Ltd is a cryptocurrency platform based in Singapore that offers financial services to individual investors who want to grow their crypto investments. With over 5,000 investors and $250 Million in custody, Hodlnaut set itself apart from its competition by offering some of the best interest rates available for cryptocurrencies. The platform are able to offer higher rates by lending the assets to established and vetted financial institutions that pay an interest rate to hold those assets.
Hodlnaut offers a Bitcoin 6.2% interest rate (as of 11 June 2021) compared to the 4.9% offered by Blockfi. No fees are charged when making a deposit however a small fee applies for withdrawals. Users on the platform are also able to invest in cryptocurrencies such as Dai (DAI), Ethereum (ETH), US Dollar Coin (USDC), Tether (USDT), Bitcoin (BTC) and Wrapped Bitcoin (WBTC). For a comparison of the top Bitcoin interest platforms, read this article.
Hodlnaut is a popular way to make money online through the interest and lending platform. BlockFi, Nexo and Celsius are similar top lending and borrowing platforms in the crypto industry like Hodlaut to earn interest on crypto or take out crypto-backed loans. Read the full reviews in the table below or visit the website for more information.
|Exchange||available Coins||interest Rate||rating||Promotion||Website||Review|
|8+||Up to 12% P.A|
|$25 Bitcoin for >$100 deposit||Visit Nexo||Nexo Review|
|25+||Up to 12% P.A|
|None available at this time||Visit Crypto.com||Crypto.com Review|
|None available at this time||Visit Coinrabbit||Coinrabbit Review|
Is Hodlnaut Legitimate?
Hodlnaut is a Singaporean-based company that is regulated by Singaporean law, which includes the Payment Services Act 2020. The Act covers cryptocurrencies classified as “digital payment tokens”. Hodlnaut’s token swapping service is the first of its kind to be regulated under the Act in Singapore. The company behind Hodlnaut is certified by the Singapore Fintech Association (SFA), which is an accreditation that is recognized by the Monetary Association of Singapore (MAS).
Products and Services
Earning Interest on Cryptocurrencies
Hodlnaut empowers individuals around the world to do more with their money and cryptocurrency investment by offering cutting-edge financial services. Hodlnaut offers the following two main products, crypto interest accounts to earn up to 10.5% APY compounded weekly and Fixed-Term loans with higher yields. For more information on how interest is earned, read our article that explains what DeFi is.
Token Swap Service
Hodlnaut provides an instant swap platform for individuals to quickly and safely exchange between the supported assets. There are zero fees to swap crypto to crypto and rebalance asset holdings in a portfolio. The benefit of using the token swap service is that investors do not need to transfer funds off the platform to exchange and incur withdrawal and trading fees.
The Hodlnaut affiliate program entitles existing users to get a 10% commission from interest paid for each successful referral. Each person that uses a unique referral link and deposits $1,000 into a Hodlnaut Interest Account will also receive a $20 sign-up bonus. Participating in the Hodlnaut referral program is a great way to earn additional crypto.
Hodlnaut Pros & Cons
- High interest rates compared to other crypto platforms so everyday investors can gain higher yields over time
- No lock-in period, no minimum deposit amount (with no fees)
- A simple, easy to use and transparent user interface
- Interest is paid every week, allowing crypto profits to compound over time
- Responsive customer support team
- Inability to deposit fiat currencies for crypto conversion, unable to buy or sell crypto
- Interest rates are not fixed and can be updated every month
- A limited number of cryptocurrencies (BTC, DAI, ETH, USDC and Tether only).
- A mobile app for Android and iOS devices is not available
- No option for individuals to deposit crypto and obtain a cash loan
Account & Verification
Before depositing funds to Hodlnaut, new customers will need to create an account, log in and complete an identity verification process. The process is fairly straightforward and will need to provide basic personal information to pass the Know Your Customer (KYC) process. A photo of a National Passport or document with Proof of Address will need to be taken. There is no option to upload an existing photo of a document which can be troublesome.
Once an account has been verified, customers can deposit funds in the form of cryptocurrencies to begin earning interest. Hodlnaut supports 5 cryptocurrencies that can be transferred including Bitcoin, DAI, Ethereum, Tether and USD Coin. There is no option to deposit fiat currency and convert it into crypto. Similar to a cryptocurrency trading platform, each supported coin has a unique address or QR code that can be scanned to transfer coins to the Hodlnaut wallet.
Earning Interest Account
The crypto interest account is Hodlnaut’s flagship product that allows individuals to transfer and deposit their cryptocurrency investments such as Bitcoin and Ethereum to earn up to 10.5% APY on their capital invested. Hodlnaut set itself apart from the competition by offering some of the best interest rates available for cryptocurrencies which makes them highly attractive for investors.
The platform is able to offer competitive interest rates on crypto assets in custody by lending the funds to trusted institutional and vetted corporate borrowers. These institutions pay an interest rate to borrow the funds which are distributed back to Hodlnaut customers. For example, Hodlnaut offers 4.28% APY within an Ethereum interest account with no maximum limit restrictions. In comparison, reputable savings account providers such as BlockFi and Binance provide a maximum interest rate of 3% APY and 2.4% APY respectively.
A few key features of the Hodlnaut crypto interest accounts are:
- High-interest rates of up to 10.5% APY with weekly payouts
- No minimum deposit is required, no lock-in period and rapid withdrawals
- No lock-ups or maximum withdrawal limits
What Are The Interest Rates?
As of 11 October 2021, interest rates on Hodlnaut vary from 6.2% to 12.73% Annual Percentage Yield (APY) depending on the asset held. For example, the annual return on a Bitcoin investment with Hodlnaut is 6.2% APY and 6.7% APY for Ethereum. The interest earned is calculated daily using the available balance within the coin's wallet.
Compared to top crypto interest platforms such as BlockFi and Nexo, the annualized percentage yield on Bitcoin is 5% and 6% APY respectively. With BlockFi, depositing higher amounts reduces the interest rate even further. Overall, Hodlnaut's interest rates are competitive but could be raised to match some of the rates on CoinLoan which is currently 7.2% APY for Bitcoin.
|USD Coin||12.73% APY|
|Wrapped Bitcoin||6.2% APY|
It is important to note the Hodlnaut interest rates can be updated each month based on the prevailing market conditions. Check the website for the latest rates.
How Often Is Interest Paid Out?
Customers that deposit funds into a Hodlnaut crypto interest account will accrue interest every week. Interest is paid out every Monday at 5 pm (GMT +8) and is combined with the initial deposit which allows the account holder to earn compound interest. The interest amount to be paid for the week in the corresponding cryptocurrency is shown as 'Pending Interest Payout' on the dashboard as pictured below. While weekly pay-outs do allow compounding, this is not as financially attractive to daily pay-outs offered on BlockFi and Nexo.
Is There a Minimum Amount to Start With?
There is no minimum deposit amount to start earning interest on cryptocurrency assets with Hodlnaut. This is ideal for beginners and individual investors alike who can deposit fractions of BTC, ETH, DAI, USDT and USDC. Interest will start accruing immediately after funds are deposited into an account.
Fixed Terms Loans
Hodlnaut also offers VIP Fixed-Term loans to its corporate and institutional customers (individuals are not eligible). This is similar to a traditional bank fixed-term loan where a user can deposit their cryptocurrency assets with Hodlnaut for a set term which typically attracts a higher yield compared to the Interest Account.
The minimum deposit amount is 100 BTC or equivalent in ETH, DAI, USDC or Tether and must be locked for a minimum term of 1 month. Companies or institutional investors that opt for a Fixed-Term loan will receive a dedicated manager to handle their account.
Hodlnaut introduced a token swapping service that allows investors to trade their digital assets for others within the platform. There are no fees or limits for swapping crypto to crypto. This means that users can take control over their cryptocurrency portfolio by managing asset balances without having to transfer coins out to an instant swapping service or a zero-fee crypto trading exchange. For residents in Singapore, the Token Swapping services will not be available from 18 June 2021.
Placing money with an online website requires trust due to certain risks and uncertainties with the security of assets held under custody. Hodlnaut offers an insurance policy to give investors peace of mind their funds can be returned in the event of a security breach or hack. Hodlnaut has partnered with Nexus Mutual to provide users with the option of getting insurance cover for up to $44 Million for cryptocurrency assets. However, unlike Nexo which offers total insurance for its assets under custody for free, Hodlnaut charges a 2.6% premium.
What Are The Fees?
There are zero fees to deposit funds to Hodlnaut for investors to earn interest, use the token swap feature or maintain an account. The platform does charge a small fee to withdraw crypto which varies on each coin which is similar to a crypto trading exchange. For example, the withdrawal fee to transfer Bitcoin is 0.0004 BTC.
|USD Coin||18 USDC|
Hodlnaut is certified by the Singapore Fintech Association as a Fintech Company and utilizes industry-leading security practices to ensure customer's funds are safe and secure. These measures include Two-Factor Authentication (2FA), mandatory verification of customers through a Know-Your-Customer (KYC) procedure and strong encryption for passwords and other sensitive information.
In addition, the platform uses Fireblock’s multi-party computation wallet infrastructure to safeguard the private keys to access the funds. The assets are initially stored using the Fireblock wallet and then transferred to Hodlnaut's cold wallet store or the funds are transferred to borrowers. Hot wallets are not utilized which can introduce a security vulnerability and have resulted in numerous hacks on crypto platforms over the years.
Users will be able to access various guides relating to the basics of Hodlnaut accounts and features. There are also detailed and informative articles that delve deeper into broader cryptocurrency topics such as blockchain, decentralized and centralized finances and cryptocurrency security.
There is a FAQ page that will help users troubleshoot issues such as 2FA and setting up an account. Users that are not able to find adequate information on the website can reach out via email, live chat or Telegram. A ticket can be submitted which requires standard information such as name, email address and a description of the query. In our experience, we received a response within 24 hours which is a reasonable time for a customer support team.
Frequently Asked Questions
Hodlnaut practices responsible and risk-aware lending practices to minimize the risk of default. Hodlnaut only lends assets to funds that borrow less than 1x of their Net Asset Value which allows the company to take on a loss in the unlikely event a borrower defaults and pays users from their equity funds.
Hodlnaut only lends to corporate entities with good credit scores and using loans with a Loan-to-Value (LTV) Ratio of 70% or lower to reduce the risk. For these reasons, the risk of default with Hodlnaut is considered to be quite low. Like most of the DeFi products, the platform will lend to multiple parties to reduce the risk of a single point of failure.
Hodlnaut does not currently offer a mobile app to check the wallet balances and amount of crypto interest earned. However, an app for iOS devices is currently being developed and is planned to be released to users in the third quarter of 2021.
Hodlnaut has an affiliate program where users can receive a 10% commission from interest paid for each successful referral. Both the referee and the new customer will receive $20 each as a sign-up bonus, however, the new customer is only eligible for this if they deposit a minimum of US$1,000. Referral bonuses are paid out in the same asset deposited.
There is no option for individuals using Hodlnaut to deposit their funds and obtain a crypto-backed loan paid out in traditional fiat currencies such as USD, EUR or GBP. This service is only offered to corporate bodies and institutions and not to individuals. Customers that want to leverage their crypto assets without selling to obtain cash will need to use a provider such as BlockFi, Nexo or Celsius Network.
Overall, the products and services offered by Hodlnaut should make the platform highly appealing for the everyday investor who wants to make their crypto work for them and grow passively. The interest rates of up to 6.2% on Bitcoin and 12.73% for stablecoins are one of the better returns in the market compared to other similar platforms. Furthermore, the Token Swap is a nice feature to balance a portfolio without incurring any trading fees.