Quick Hodlnaut Update: Earn Up To 14% Interest With Stable Coins

15 June 2022 Update: Due to the lack of transparency of most centralised custodians and the risk of contagion in a crypto bear market, I no longer recommend anyone to park more than 10% of their crypto assets with a single custodian. I have personally withdrawn >95% of my funds out of Hodlnaut and into a cold wallet for self custody.  

This is an update on Hodlnaut and is definitely not a sponsored post, in case you are wondering.

If you are not a Hodlnaut customer and plans to open one, you can

• use my referral link and deposit $1,000 to enjoy a $20 signup bonus

I wrote a review on Hodlnaut less than 2 months ago and my only concern then (as crypto sentiments turned bearish) was that the returns might be lowered soon. That was what happened with BlockFI and Celsius.

So you could imagine my surprise when I read this announcement from Hodlnaut a couple of hours ago.

Basically, they are introducing tiered interest rates and offering generous returns for the lowest tier. As an example, I have attached the updated USDC rates below.

Previously, the return was a flat 10.5% on all USDC balances. If we look at it on an aggregate basis, with the above changes, it is likely that Holdnaut will be paying out less interest to their customers.

However, this is great news for me. 12.73% interest on my stablecoins, an increase of 2% per year!

As stated in my earlier article, I see parking some of my crypto, especially stablecoins as a form of diversification. Being a crypto newbie, it would also take some time before I come close to the USD 25,000 cap for the first tier.

And well, since the cap is also siloed within one type of asset, I could always decide to park USDT instead of USDC if the cap is ever reached. And if the Mrs’ account has reached the cap, there’s always my account for me to return to.

Honestly, I view such tiered interest structures (becoming the default) in crypto centralised platforms with alot of curiosity. Banks typically reward whales with better products or higher interest. Probably more profitable to service fewer clients given the same AUM. So it does seem counterintuitive to offer better rates to customers who park less assets. Not that I am complaining, of course.

The only other product that offers such a progressive structure with a bias towards shrimps? CPF and its extra interest.

Anyway, I digress.

Hodlnaut has a very powerful referral program designed to reward both the referrer and referee. In their words:

Basically, if my wife has 20,000 USDC in her Hodlnaut account, she will receive $2,546 of interest in a year under the new rates and tiers. Since she used my account’s referral link, I will enjoy 10% of her interest, which is $254.

“If we add up the total interest, it is $2,546 + $254 = $2,800. Yes, that is then a sweet 14% of returns. “

For more information on how to use the strategy to your advantage, do refer to my earlier article, which I will likely update after 9 August, when the new rates come into effect.

The icing on the cake is that Hodlnaut has reduced their withdrawal fees, so that users like me can maximise returns.

I personally think crypto is here to stay.

I have just participated in a degen farm for two weeks (earning >2% yield a day) and made out with decent profits. Next, I am likely using these proceeds to enter a play-to-earn crypto game. The crypto disruption to existing industries is very real and spreading very quickly.

Look, I am not a fan of putting all your crypto assets in centralised platforms. There is alot of truth to the saying “Not your keys, not your coins”.  So there is a certain discomfort to shilling this.

But at the same time, CEXes are good diversification and this is probably the easiest way for a newbie to start and put idle BTC or stable coins to work.  Whether it’s 7.5%, 8.5% or even 14%, the returns are many times higher than 99.99% of traditional deposits or bonds.

Of course, none of the above is financial advice and in crypto, you could easily lose everything. So please do your own research and make your own decisions. But the flip side to this is one could really risk falling behind if the space continues to thrive.

Thank you for reading!

Disclaimer: This article contains affiliate/referral links and any support is much appreciated! Signing up using referrals ensure that you will benefit too, as seen below. 

Hodlnaut: Receive a US$20 signup bonus after making an initial deposit equivalent of US$1000