Primer: Hodlnaut is a Singapore based company certified by the Singapore Fintech Association and accredited by the Monetary Authority of Singapore. They are similar to Celsius where users can deposit assets and lend them out in order to obtain an interest rate (up to 12% in USDC). In this AMA, join host Chang Teck - social media manager of Hodlnaut - and Sten Ivan - Head of Growth - as they answered a few burning questions that users have of their platform.
Where is Hodlnaut based in?
The company is incorporated in Singapore, so subjected by the laws of Singapore
The operation of the business is based in Singapore
Founded 2 years ago in 2019
Currently exempted from holding a license under the payment services Act
Cannot give a timeline when they will be getting a license
Everyone is working to comply with all the regulations and rules currently
High chance of obtaining the license
Certified Fintech by Singapore Fintech Association
Accredited by the Monetary Authority of Singapore (MAS)
What will happen to Hodlnaut if there is a change in govt regulations for cryptocurrency or lending platforms?
If there is a change in regulations, they will adjust their business operations to cater to it
There are contingency plans to make sure that the business process can continue
If all else fails, users will be notified in advance and allowed to withdraw their funds
What is the lead time that users have for such notifications?
They had a previous experience when token swap within the platform was disabled back in June
Gave users a 2 week lead time for them to decide if they want to continue or withdraw their funds
Users will definitely have a say in where to direct their funds
What happens if Hodlnaut gets hacked?
Have strict security measures in place
No hot wallets at Hodlnaut
Using Fireblocks Multi-party computation (MPC-CMP) wallets where no single stakeholder has full control over fund flows
Only 2% of their assets under management (AUM) are in Fireblocks wallet for liquidity purposes. The rest is under self-custodian cold wallets
Liquidity is needed for withdrawals by users
Most withdrawals take place within 30 mins, but sometimes it might take longer because they will conduct checks to make sure that the withdrawal is authentic
If a hack really happens, Hodlnaut will pay back users with their equity funds. No guarantees that it can cover 100% of the lost funds
There is an insurance option for users to have custody cover for their funds through Nexus Mutual's Hodlnaut Custody Cover smart contract
How does Hodlnuat afford to pay these interest rates?
Interest rates are variable and subject to changes
They can only do their best to keep the rates competitive
Takes into account the supply and demand of their crypto assets, as well as earnings from previous months, to set the rates
What's the percentage of lending to DeFi protocols vs corporate clients?
They do lending to corporate institutions and DeFi protocols
No fixed percentage as a company strategy - it will change according to the market
The DeFi protocols that they lent to are audited and VC-backed e.g. Compound Finance
Corporate institutions that they lent to have good credit scores and the loans to value are usually 70% or lower
Not able to share which are the corporate clients - private and confidential information
Have strict margin calls in place and no borrowers have defaulted on their loans in their 2 years of operation
Have not suffered any loss of users fund before
What's Hodlnaut's roadmap?
Autoswaps and scheduled swaps
Android app mobile launch
Crypto card to get cashback for crypto purchase - not confirmed if it will be launched
Possibility of adding a new token - will bring competitive interest rate to the users
What is Hodlnaut's Unique Selling Proposition (USP) compared to other big players in the market?
Tough as a young and small player to compete with BlockFi, Nexo and Celsius
Will concentrate on providing the best customer service
Had a lot of good reviews from different places
Have a speedy and quick solution to customer's problems
Also, have exciting things coming up in their roadmap
"One thing that we take pride in is providing the best customer service that's reliant, that's fast. We want to be available when you guys need it and this can be reflected in the number of user reviews that we have." - Sten Ivan
The company is incorporated in Singapore, which is a triple-A country by the world bank
Has good financial standing and is well respected globally
Have stringent regulations by MAS, so they can't take away the money and run away
What happens if China raids HK and seizes the operations and assets? Will non-SG users lose access to their funds?
The HK office is part of the contingency plan in case they do not get their license in Singapore and they can't operate in Singapore
It is a backup plan for them
Is an entity for non-Singaporean users
Allows them to roll out new features quickly without the strict regulatory requirements from Singapore
E.g. Token swap feature - disabled in June but enabled again in Aug
Will cause disruptions to other non-Singaporean users so using another entity in HK without all these regulations make sense
All the funds and operations are based in Singapore and there are no funds in HK
Do you plan to stay solely on the lending business or expand to other features for revenue?
The core mission and vision for the co-founders is to help users get the most out of their assets and through crypto lending
Will still be focusing on that as the main product but will also be looking for different ways to serve users better
New features and products might not be lending related, e.g. spot trading
Are there any plans to support fiat deposit and withdrawal directly?
Working on it but no definite timeline
Have a partnership with Okcoin to allow direct fiat deposits and withdrawals on their exchange
Users can purchase BTC, ETH on their platform and transfer them straight to the Hodlnaut platform itself
What if Hodlnaut does not get the license?
Have contingency plans in place like the entity in HK
There are others but they can't be disclosed right now
All the funds will be safe if somehow Singapore does a heavy clampdown on cryptocurrency
If you are interested in joining Hodlnaut, do check it out and use our referral links below:
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