How to earn interest on your bitcoins with Hodlnaut

By doufu | bitcoinsg | 18 Jun 2021

What is Hodlnaut? Their FAQ says it all: "Hodlnaut is a platform that provides financial services for individual investors where they earn interest on their cryptocurrencies by lending it to corporate borrowers, who would otherwise struggle to access crypto loans."

My simple understanding is that it is a place to park my Bitcoins for interest and the rates are much higher than banks or saving funds. Sounds good, but what is the catch?

Hodlnaut is currently on this list of companies working with the Monetary Authority of Singapore to issue them a licence under the Payment Services Act. So far it's still in progress. What will happen if they are unable to get the licence? That's a risk but as in all things, you have to decide if the reward outweighs the risk.

Source: Monetary Authority of Singapore

They have also recently been audited and their support on Telegram is quite active. I have not yet need to request for any email support as my use of the platform has so far been smooth.

Is Hodlnaut safe? I think so, but there are risks involved. Don't simply listen to a stranger on an online blog. This article is simply to share my own experience with parking my Bitcoins with Hodlnaut. You have to make up your mind after you do your own research.

Personally, I have about 50% of my BTC parked in Hodlnaut. This is my way to diversify and reduce the risk of one platform failing. Don't put all your eggs in one basket.

Interest rate

Hodlnaut BTC interest is currently at 6.2% APY. The interest is compounded daily and paid out weekly. I really like their running interest ticker that shows your interest accumulating in real-time.

Animated gif of the running interest ticker (click to see)

The list of assets the accept is quite small now. I am only depositing my BTC, so that's fine. But their interest rates are quite attractive compared to other similar platforms! I am only looking at the APY as I want my assets to compound.

Deposit my Bitcoin

The main problem of moving your BTC around is the fees. Crypto exchanges like Binance.com charges 0.00057 BTC (SGD$30) to withdraw your bitcoins. To save on fees, I use Gemini ActiveTrader to buy my BTC and send it over to Hodlnaut at no cost as Gemini allows 10 free withdrawals per month.

I have been DCA buying and sending my BTC to Hodlnaut and so far the experience is great. The funds will first appear as "Pending" in Hodlnaut within minutes of sending from Gemini and usually be completed within 1-2 hours. Hodlnaut will send out emails to notify once the transfer is completed.

Now all you have to do is to HODL and see your interest grow.

Withdrawing my Bitcoins

Hodlnaut charges a withdrawal fee of around SGD$21 (0.0004 BTC) if you want to take out your Bitcoins. That's a downside if you compare that to BlockFi (one free withdrawal a month) or Celsius (zero withdrawal fees).

However, I am planning to use Hodlnaut to hold my BTC long term so that's not a major problem for me. Moreover, Hodlnaut's interest rate for BTC is higher than Blockfi (5%) and Celsius (3.51%).