Lend at Hodl Hodl is a p2p non-custodial bitcoin-backed lending product by Hodl Hodl, a bitcoin exchange. Users can borrow USDC, PAX, USDT, DAI and other stablecoins using bitcoin or Liquid Bitcoin as collateral.
HODL is a popular slang in the bitcoin community that came from a misspelling of “hold” that refers to buy-and-hold strategies in the context of bitcoin and other cryptocurrencies. The term HODL (or hodl) originated in 2013 with a post on a bitcointalk forum.
A contract is created on Hodl Hodl platform, which generates a unique escrow. The platform uses three multisig escrow addresses to secure users’ bitcoin. The lender will get one key from the multisig, the borrower getting the second and Hodl Hodl the third one. Borrowers will deposit bitcoins in escrow from their wallets. Bitcoins are used as collateral for funds borrowed. Minimum loan amount is 50 USD equivalent. Users can lend and borrow for a period ranging from one day to one year.
The lender will transfer the amount the borrower has requested in the contract. When the borrower repays the loan in full, the lender then releases the bitcoins to the borrowers wallet. Funds can be released from escrow by two signed keys. If there is a dispute, the third key held by Hodl Hodl will be used.
To start lending or borrowing on the platform, you simply need to sign up with your email address and a password. Once you click the confirmation link sent to the email address you used, you can start to lend or borrow
- An email notification will be sent out to alert Borrowers of a price decrease. To bring a Loan back to the original Loan-to-value ratio, a Borrower may: deposit additional Collateral or proceed with a full or partial repayment of debt
- Any gain in the value of bitcoin is yours to keep. You only ever owe the amount of your loan, which is pre-determined and not affected by the price of bitcoin.
Hodl Hodl claims it will be the first true bitcoin DeFi (decentralized finance). Some of its unique features include:
- Non-custodial. Hodl Hodl does not store borrowers’ bitcoin. Borrowers lock their bitcoin in multisig escrows until the loan is paid in full.
- Anonymous. Users participate in lending and borrowing without having to go through know-your-customer (KYC) procedures.
- No third party involved. The lender and the borrower will agree on the amount, loan duration, interest rate and the loan-to-value ratio.
Lend at Hodl Hodl’s origination fee is between 0.5 to 1.5% of the loan amount depending on the contract period. The fee is paid by the borrower. For each loan contract, Lend at Hodl Hodl will take a 2% commission. Commission will automatically be charged after the Contract comes into force. Origination fees according to the loan duration are: 1 day: 0.5%, 1 week – 5 months: 1% and 6 months – 12 months: 1.5%
The platform does not store the funds or the collateral used in the exchange. Instead, funds are stored in multisig escrow, thereby providing an added layer of protection to your funds and Bitcoins. In order for funds to be released from escrow, the transaction must be signed by two keys.
Lend at Hodl Hodl does not process any private information. The only personal information needed to start lending or borrowing is a valid e-mail address and a password.
Lend at Hodl Hodl offers its services to bitcoiners around the world. The platform started offering bitcoin-backed loans to US customers at the end of 2020.
- No hidden fees. Lend at Hodl Hodl is transparent with all their fees, ensuring you do not incur costs you are not aware of.
- Secure. It uses multisig contracts while you have a key you can use to control funds in escrow.
- No third parties. The platform acts as an intermediary and there are no third parties, this ensures that you receive funds directly from your counterpart.
- High liquidity. Lend at Hodl Hodl uses bitcoin as collateral which has high liquidity.
- No credit check. Your credit score has no impact on your eligibility since the platform does not conduct credit check.
There are many other P2P lending platform where borrowers use bitcoin as collateral. Lend at Hodl Hodl alternatives include:
Just like other P2P lending platforms, Lend at Hodl Hodl will make it easy for lenders to borrow against crypto assets. Fortunately, Lend at Hodl Hodl does not store bitcoin on the platform. This is a great way to improve the security of users’ funds.