The decentralized finance industry continues to gain momentum as more investors realize its potential. Innovations inside the DeFi ecosystem continue to break down walls and barriers across economic realms.
However, one of the trickier aspects of DeFi and the wider crypto ecosystem is buying and holding assets to participate in these industries through immense market fluctuations. It can be very tough to HODL as an investor watches how quickly the price of a particular coin can move in just a few seconds.
Platforms like YouHodler were created to help solve issues like these. Users can hold crypto coins while leveraging them for loans, mirroring the lending and borrowing business model practiced across many centuries by traditional banks.
What Is YouHodler?
Based in Switzerland, YouHodler functions as a crypto-backed loan service provider. Users on the platform can instantly borrow fiat based on the value of their underlying crypto asset holdings, or convert their virtual currencies to other crypto and fiat.
Alternatively, users can hold digital currency on a YouHodler savings account and withdraw any fiat money on the platform to a personal bank account or credit card. However, the platform does have some restrictions and is not accessible to residents of the USA, China, North Korea, Sudan, Syria, Palestine, Iran, Cuba, Crimea, Pakistan, Iraq, and Bangladesh, at the time of writing.
The platform was founded in 2018 and is insured for up to $150 million via a customized crime insurance program led by Arch UK Lloyds of London. Their platform is also licensed by the European Union Financial Commission. Founder Ilya Volkov remains an active member of blockchain and crypto-related organizations and holds 15 years experience in commercial finance and trading. CTO Renat Gafarov has worked on hundreds of unique smart contracts and has spent years crafting blockchain integration solutions.
YouHodler offers users a variety of services, including:
Crypto Savings Account: Those on YouHodler can earn up to 12% APR though an interest-earning crypto savings account. After deposit, weekly interest payments can be accrued in Bitcoin or other cryptos like stablecoins. An intuitive dashboard makes it easy to monitor interest. A unique feature of YouHodler is there is no deposit threshold to benefit from the best interest rates.
Crypto-Backed Loans: Users can also secure a fiat currency loan using crypto as collateral. These types of loans are best for those interested in getting fiat without having to sell digital currency. Since these loans are over-collateralized to account for volatility, users will have to lock up digital currency that’s more valuable than what they are trying to borrow. However, this is a typical practice in the crypto-backed loan world. Loans on the platform can be as small as $100 and users can select 30, 60, or 180 day terms. Unlike traditional loans, there are no eligibility criteria like credit scores of financial checks to secure a loan. A user just needs to want to borrow at least $100 from YouHodler to receive a loan and have the right amount of collateral.
Exchange: The YouHodler exchange makes it simple for users to switch between platformed-supported cryptocurrencies and fiat. On-platform tools show the estimated fee, arrival time, and exchange rate. The idea is to eschew a complicated trading interface and give users the feeling of an ‘instant’ swap.
Multi-HODL: These tools allow YouHodler users to take advantage of market volatility. The multi-HODL feature lets users take a portion of their funds and then speculate on the price of one of their currencies. Leverage comes from borrowing extra funds to amplify profit or losses while maintaining the ability to set stop-losses and take-profit levels. Users are also still able to earn interest. Users can select the up option to use crypto as collateral with USD as the borrowed currency, working best if a user thinks the value of crypto will grow. If they believe the opposite, the down option uses USD to borrow crypto assets.
Turbocharge: Turbocharge lets a user take an entire deposit to borrow fiat and then purchase more cryptocurrency, functioning as a ‘synthetic’ margin trade. In contrast to multi-HODL, turbocharge is only used when a user believes the price of their asset will go up.
Mobile Application: All of the platform’s core services are able to be accessed in a mobile application that can be found on either iOS or the Google Play store.
Speed, Security, Insurance
The YouHodler website spells out a variety of security features. The team says funds are stored in a mixture of hot and cold wallets and the platform incorporates Ledger’s technology to offer advanced custody options.
Funds are also protected as YouHodler benefits from Ledger Vault’s pooled crypto-asset crime insurance program with up to $150 million in coverage. Led by the Arch UK Lloyds of London syndicate, the insurance covers employee theft and outside robbery of private keys and the master seed.
YouHolder users should understand, according to the team, that Ledger will never hold YouHodler’s keys or managers even though the platforms are linked.
A backup mechanism means the YouHodler team can retrieve lost funds without having to turn to Ledger. Vault access is also distributed across different managers who have varying access rights, yet are still required to adhere to mandatory multi-signature principals.
YouHodler also gives users the opportunity to secure their assets with 3FA protection. Balances of over $10,000 (or the equivalent in crypto and fiat) can ask to disable all withdrawal options. YouHodler would then only allow withdrawals by the request of the account owner after verifying their identity again.
Deals with Elliptic and CipherTrace help analyze all transactions to protect against fraud schemes, terrorist financing, money laundering, and sanctions evasion. Of course, users can also take advantage of 2FA if they have less than $10,000 and use a strong password to keep their account safe.
The platform also writes about various procedures and laws they are bound by to enhance security. For example, deals are structured by contracts that fall under EU law, meaning the platform is “bound by law to return your cryptoassets.”
Additionally, YouHodler’s status as a Blockchain Association member means users have a way to dispute resolutions by a third party and receive outside assistance. YouHodler writes this security essentially functions as a form of crypto insurance for clients since resolutions from the Association are quick and unbiased. The team says they have not heard of any instances where a YouHodler client complained to the Association.
Fees and Access to Funds
Since YouHodler deals in crypto loans, the fee structure varies based on a couple of factors. As of March 2021, the fee breakdown is:
30-day loan: 3% loan fee, 90% LTV, -5% price down limit (PDL)
60-day loan: 5% loan fee, 70% LTV, -25% PDL
120-day loan: 9% loan fee, 50% LTV, -40% PDL
A user can also customize loans upon request and just need to pay the loan fee to reopen another loan. Those with a loan can also activate Turbocharger where a flurry of loans can be set in motion after the app automatically executes them.
If a user does not pay their loan on time, YouHodler can extend for up to 14 days before closing. They will also charge an extension fee of 1% of the loan overdraft amount per day and deduct the ensuing cost from the loan collateral.
People interested in withdrawing their money can take advantage of a bank wire or by using a Visa or Mastercard. Fund access will depend on the individual bank’s policies.
How to Set Up a YouHodler Account
Setting up a YouHodler account is a pretty simple process.
- Visit the YouHodler Website: A trip to the website presents prospective users with the option to create an account either with the signup link or the ‘Get Loan’ link.
- Fill Out Required Information: Users are asked to input an email address and then perform a couple KYC verification steps. Moving through verification is smooth as users just have to input a certified IDs and take a selfie to confirm identity.
- Set Up 2FA: While implementing 2FA is optional, YouHodler recommends it to make the experience safer.
Now users can begin the process of starting a crypto loan, earning interest, and withdrawing their money!
YouHodler Crypto Savings Account Features
The platform lets users earn up to 12% a year by depositing crypto and then transferring them to a savings account. Eligible coins include BTC, ETH, PAXG, HUSD, DAI, TUSD, PAX, USDC, and USDT.
Funds are paid out based on weekly compound interest in both stablecoins and fiat. Savings funds can also be used as collateral for lending products. The compound interest is calculated roughly every six hours.
However, savings account holders should note that releasing funds before the end of a weekly period means the accrued interest from the week is lost. Those who deposit additional crypto will receive the interest in just the week following. However, assets can be removed at any time.
As mentioned earlier, users can harness their crypto savings accounts for the Turbocharge functionality. The platform will automatically use collateral for the loans. Turbocharge is lucrative because there are no extra fees beyond the first loan and the loan interest rate is also lessened.
YouHodler Crypto-Backed Loan Account Features
YouHolder users can use fourteen different cryptos as collateral for a loan. Getting a loan usually takes seconds and the platform comes equipped with a variety of features to manage the loan and respond to market changes.
For example, YouHodler offers a few ways to exit a loan aside from just paying it off. Closing a loan without repaying it fully means the loan will be fulfilled using a holder’s collateral. ANy remaining crypto will then be automatically sent to the user.
There’s also an option to reopen a loan with the same terms if the current term is close to maturity. Extending the price down limit is also an option if a user would like to add extra collateral.
Finally, users with a top rate LTC of 90% can just receive a loan and walk away, with no consequences, with 85% of the value. The ‘walk away’ feature helps YouHodler users exchange crypto for cash in a free manner.
YouHodler also understands market forces dictate how a loan holder might want to respond. As a result, each loan comes with a ‘Price Down Limit’ to ensure the loan amount will not change. YouHodler then reserves the right to close the loan and sell collateral if the price of a crypto backing a loan drops behind the PDL.
Users are notified if the price dips below ⅔ of the PDL. This is a coursey service and does not cost any fees.
Loan holders can also set a take profit price on a loan and watch as the platform automatically sells off collateral to pay the loan – depositing the extra funds in a user wallet. Setting the close price is done when a user originally requests a loan.
YouHodler Customer Sentiment
The platform has pretty good customer sentiment at the time of writing, as YouHodler looks focused on keeping a strong reputation as the DeFi world keeps expanding. Users have lauded the platform for its live chat, email, and phone services and the good response times on each of the mediums.
YouHodler’s iOS app has 4.8/5 stars at the time of writing. Reviewers appreciate how easy to use the platform is and the responsiveness of the many features on mobile. Some users even claim it’s easier to use than other platforms like Kraken.
On the iOS side, the majority of the negative reviews revolve around the fact that U.S.-located people can’t use YouHodler. Some complain they started to input personal information before realizing it would not allow U.S. customers and question what the platform is then doing with the information.
However, the YouHodler team does take time to respond to these kinds of reviews and remind users they are limited by legal restrictions to service U.S. customers. Team members do note they are working on this front and will inform if the situation changes. YouHodler’s website also looks at a visitor’s IP and will notify a person if they try to register if they are detected to be accessing the website from the USA.
The platform has 4.1 out of 5 stars on the Google Play store. Positive reviews note the sleekness of the platform and its user friendly nature. Even though some note the fee structure is high, they applaud YouHodler for being honest about fees up front and for providing options that can help crypto holders ‘get the most out of their money.’
Negative reviews focus on a few key points. Some users indicate issues with the app crashing upon opening and then having to try and reinstall, or just turning to the web browser for a smoother experience. Sometimes these issues can be as a result of a specific update or modification and can be resolved in future editions.
The YouHoder team does look to be responding to these types of issues with a request to reach out to the support team if needed. Some negative reviewers who write about application bugs do note the customer support has been prompt with getting back to users and addressing issues.
Many other negative reviews centralize issues with the reCaptcha verification service and how it does not verify properly to let a user register. YouHodler looks to be responsive with these types of requests and notes that reCaptcha is a ‘black box service,’ writing that as a result they might not be able to actually ascertain why there is an issue.
Overall, customer sentiment looks to be strong and there are many positive reviews that highlight the platform’s usefulness, simplicity, sleekness, and transparency.
YouHodler is a unique platform that offers a lot of financial options. As the DeFi world keeps expanding and features more innovation, users are undoubtedly looking for ways to profit and make money with their funds in safe ways. Many are wary of options like yield farming and look for ‘safer’ alternatives like crypto savings accounts and similar financial tools.
YouHodler offers new and experienced crypto users opportunities to make strong returns or to just leverage digital assets to make more money. The platform is transparent and honest about fees and the ability to quickly set up accounts is another plus.
The lack of support for U.S. customers is a big drawback, but the myriad of laws in the nation do not make it surprising that the platform can’t service these types of customers. Odds are good they will figure out a way, like many other crypto entities do, to function in the U.S.
Security is always a big issue with crypto platforms and YouHodler’s vast range of options should encourage investors. The ability to secure larger accounts with extra measures like 3FA is not often seen with other protocols, while the infrastructure messaging with the reputable and secure Ledger vault is another bonus.
Overall, YouHolder is a secure and effective platform for those interested in crypto loans and savings accounts.