Hodlnaut Interest Account: 10.5% Interest Rates Explained
Any HODL-er or crypto enthusiasts would like to earn interest on their assets in a hassle-free manner, and one of the best ways to do it is with Hodlnaut. Our interest account is effectively giving you annual interest rates up to 10.5% on your USD Stablecoins, such as Tether and USDC, with no minimum deposits or lock-in periods. In addition, we also offer a 6.2% annual interest in Bitcoin, and all deposits automatically earn the best rate and the interest compounds at the end of each month.
Sounds too good to be true? Those who have deposited their crypto and earn interest with us would confirm that it is true. The next question is: how is that possible? In reality, banks are paying their depositors a 1.3% annual percentage yield (APY) on average for the savings account.
How can Hodlnaut pay an 10.5% annual interest rate?
To put it simply, we analyze supply and demand on our available crypto assets to set a fluctuating interest rate that adjusts as market conditions change. Also, we take earnings from our previous months into consideration.
While we try to keep our interest rate constant, it is subject to change and updated monthly based on the market conditions. The good news is all Hodlnaut users automatically get the highest interest rate possible, and you can check the latest available prices on our website or in your account dashboard.
How do I know Hodlnaut’s borrowers will pay back their loans?
As with any investment, there are risks, and you need to understand the fine print before investing. At Hodlnaut, we take significant measures to ensure the assets in our custody are safe. We only lend to selected partners that we have vetted and are mostly regulated entities in Singapore (our headquarters). Furthermore, we have built and maintained good relationships with all of our partners, and we make sure they have excellent financial standing.
Because we’re very selective with whom we lend out to, making sure they have a solid credit score, the loan is collateralized. This results in the risk of default very low. In the worst-case scenario where borrowers refused to return the coins, Hodlnaut will revert to the substantial legal contract and take appropriate legal action to recover the funds.
We do our best to keep our interest rates competitive among other players in the industry. The overall market conditions and the supply and demand influenced the way we calculate our interest rates.