Ask Hodlnaut Anything: October's AMA Recap

Hodlnaut, a Singapore-based crypto lending firm, held its first-ever AMAs on 17 October 2021 to address commonly asked questions from users. The AMAs is a great avenue for users to clarify any queries and questions they have with regards to the Hodlnaut platform. 

If you missed out on the AMAs, here’s a recap of what went down. 

Pre-AMA Questions

Pre-AMA questions are those that have been sent in from our users prior to the actual live AMA that was held. 

1. Is Hodlnaut regulated?

Hodlnaut is based in Singapore and ruled under Singapore Law. At present, Hodlnaut has been granted an exemption from holding a license under the Payment Services Act. Hodlnaut is a certified Fintech by the Singapore Fintech Association, an accreditation recognized by the MAS (Monetary Authority of Singapore).

2. What will happen to Hodlnaut if there is a change in government regulations for cryptocurrency or lending platforms?

If there are any new regulations, we will adjust our business operations according to what is required by the MAS. Contingency plans are in place to ensure that business processes can continue. If all else fails, we will notify users in advance and allow them to withdraw their funds, just like how we informed users about switching off Token Swap in Singapore or the change in crypto interest rates previously.

3. What happens if Hodlnaut gets hacked?

We have very stringent security measures in place. At Hodlnaut, we take a security-first approach and there are no hot wallets at Hodlnaut. We use Fireblocks’ MPC-layer wallets, which are very secure and a key sharding process so that no single stakeholder has full control over fund flows. Additionally, we only leave 2% of our AUM in Fireblocks’ wallet for liquidity as most of our AUM is usually deployed or transferred into our own self-custody cold wallets! 

In the unlikely event that a hack happens or if Hodlnaut is forced to end its operations, Hodlnaut will be taking on the loss and paying our users from our equity funds. However, we will not be able to guarantee that all users will be able to get back all their funds. 

If you would like additional protection on your assets, Hodlnaut users can get custody cover for their funds through Nexus Mutual’s Hodlnaut Custody Cover smart contract.

4. How does Hodlnaut afford to pay these interest rates?

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.

5. What is the percentage of lending to DeFi protocols vs corporate clients?

Hodlnaut’s strategies change dynamically according to the market, so there is no fixed percentage. This is one of our plus points as our team is very agile and therefore, we can always ensure that our yield generation strategies are optimized.

The DeFi protocols we lend to are audited and VC-backed, such as Compound Finance. 

The corporate entities that we lend to have good credit scores and our Loan-to-Value are usually 70% or lower. We are not able to share specific details of our corporate clients as this information is private and confidential and is competitive intelligence. We seek users' understanding regarding this.

To provide some reassurance, we have strict margin calls in place and no borrowers have defaulted on their loans, and we have never suffered any loss of users’ funds.

6. What is Hodlnaut's roadmap?

Hodlnaut’s roadmap can be seen on the website under our About Us section. At the moment, we are focused on providing features such as:

• Portfolio management 
• Auto/scheduled swaps
• Android mobile app launch
  

Fiat-on-ramp is a feature that we are looking to implement in the future, but there is no concrete date for it. As some of you already know, we are exploring the possibility of issuing a crypto card. However, we can’t confirm whether we will be launching it. 

Live Questions Answered

1. What's Hodlnaut's USP compared to other big players in the market?

Being a fairly small and young company, it’s really tough competing with big companies like BlockFi, Nexo, and Celsius. One thing we are really proud of is providing the best customer service that is reliant and fast. We want to be available when our users need us and this can be reflected in the number of user reviews on Trustpilot, SourceForge, and even on Facebook. 

On the product side of things, we have many exciting things in the pipeline. We have plans that are not confirmed yet but we do have the Android Mobile App coming and we are thinking of adding a new coin too.

We did a poll previously on Telegram on users’ preferences for new coins and Cardano came up on top. So we are looking at the stability of adding Cardano onto the platform but nothing is confirmed at the moment. 

Plus, features like Token Swap and Preferred Interest Payout make up the whole product that is Hodlnaut. These help our users get more out of their digital assets - and that’s what we’re all about. 

2. What happens if China raids HK and seizes all your operations and assets? Will non-SG users lose access to their funds?

The Hong Kong office is an entity that non-Singaporean users face for us to roll out new features as quickly as possible so that they can have access to these new features. To give you a final assurance, all funds and operations are based in Singapore. No funds are in Hong Kong. 

3. Do you plan to stay solely on the lending business or expand to other features for revenue?

The vision and mission that the co-founders had, in the beginning, is to help hodlers get the most out of their crypto and one way to do that is through crypto lending. We are still focusing on that to this day. This will still be our main product but we are always looking for ways to serve our users better and sometimes, it would mean launching new products that can enhance user experience. 

In the future, we might have additional features that may not be lending-related. But for now, we are still focusing on crypto lending. 

4. Are there any plans to support fiat deposit and withdrawal directly?

We are working on it and we cannot give you a definite timeline but right now, do take note that we still have our ongoing partnership with Okcoin, which allows for direct fiat deposits and withdrawals on their exchange. You can also purchase BTC, ETH on their platform and transfer them straight to the Hodlnaut platform itself. 

5. What if Hodlnaut does not get the license?

If we do not get the license in Singapore, we do have certain contingency plans in place like our Hong Kong entity. Unfortunately, we cannot disclose all our contingency plans right now due to competitive intelligence but do be rest assured that if we do not get the license in Singapore or if Singapore does a heavy clampdown on cryptocurrency, user funds are safe and we will find other means to ensure business operations do continue. 
If you have any other questions, be sure to check out our FAQs or drop us an email at support@hodlnaut.com. We will reply to you as soon as we can. And remember to sign up for an account to start earning more on your crypto assets easily!