FAQ

Basics

What is Lend at Hodl Hodl?

Lend at Hodl Hodl is a P2P Platform that provides an opportunity for its customers to place Lending and Borrowing Offers. As a result, users can Lend or Borrow Cryptocurrencies without selling their Bitcoin, using it as Collateral instead. The underlying technology works the same as in the Hodl Hodl trading Platform. The Lending Platform is based on multisig smart Contracts and allows clients to find their counterparties through the Offers placed on the Platform.

The Platform allows customers to find an Offer to either Lend or Borrow specified amounts of Cryptocurrencies for a specified interest rate within a specified period of time. No third parties are involved. No verification is required to Lend or Borrow.

The Platform ensures safety by providing a unique multisig escrow for every Contract created. Two out of three keys are needed to release the Collateral from the multisig escrow – one belongs to the Borrower, another belongs to the Lender, and the third belongs to the Platform.

Interest rates, and all other terms, are set by the customer. No hidden rates apply.

How does Lend at Hodl Hodl work?

  • Contract is created, and our Platform generates a unique escrow.
  • Borrower deposits Bitcoin as Сollateral into the escrow, directly from their wallet.
  • Lender transfers the Loan amount to the Borrower, as according to the Contract.
  • When the Loan is repaid, the Lender releases the Bitcoin back to the Borrower's wallet.

Why should I use Lend at Hodl Hodl?

Here are some of our advantages:

  • You don't have to sell your Bitcoins
  • Multisig escrow addresses – secure, proven, and actively used as a Collateral storage system
  • No third parties involved
  • Short-term Loans available
  • Minimum Loan amount – 50 USD equivalent
  • No credit checks
  • Transparent process, no hidden fees
  • YOU set the terms!

How do I start Lending/Borrowing?

  • Sign up with an email address and password;
  • Follow the confirmation link sent to your email address;
  • Engage in contracts right away!

How much does it cost to use Lend at Hodl Hodl?

Lend at Hodl Hodl's Origination fee varies from 1 to 1.5% of the Loan amount depending on the contract period. It is paid by the Borrower and is locked in the multisig escrow address along with the Collateral. Commission will automatically be charged after the Contract comes into force. The following Origination fees apply for the given terms:

  • 1 - 5 months: 1%
  • 6 - 12 months: 1.5%

What type of Collateral do you accept?

Bitcoin.

How is the required collateral amount calculated?

Collateral amount = (Loan Amount + Loan Amount * Interest rate) / LTV Ratio

The value of the Collateral is determined by the LTV ratio. In general, the lower the LTV, the higher the value of the Collateral.

Enter the details of your Contract to calculate the collateral amount required.

Are there any fiat Loans available at Lend at Hodl Hodl?

No, Lend at Hodl Hodl is a true P2P Platform that wishes to eliminate fiat-related risks for its clients by avoiding the use of a middleman such as a bank.

What Cryptocurrencies are available at Lend at Hodl Hodl?

L-BTC Liquid, DAI, USDP(PAX), USDT Omni, USDC TRON (TRC-20), USDC Ethereum (ERC-20), USDT Tron, USDT Eth, USDT Liquid, WBTC.

What is the Loan-to-value (LTV) ratio, and how does it work?

LTV ratio = Loan Amount / Collateral amount * 100

A Loan's LTV (Loan-to-value) ratio determines the amount of crypto Collateral you need to secure in order to receive the Loan. In other words, the LTV ratio shows the relation between the Loan amount and the Collateral's value.

In case the Collateral's value goes down – the LTV ratio goes up, and the Borrower needs to either increase the amount of Collateral or partially repay the debt to keep the LTV ratio at the required level. Otherwise, if the customer fails to balance the LTV ratio in a timely manner, Forced Liquidation occurs.

The following LTV ratios are allowed:

  • 30% - 70% LTV for fiat backed Cryptocurrencies
  • 80% LTV for Bitcoin equivalent Cryptocurrencies

What index is used for cryptocurrency prices?

The data is fed by the leading exchanges such as Kraken, Binance, Bitfinex, etc.

What are the interest rates?

Interest rates are set by the offer creator and applied for the whole loan term. For example:

For the Lender.

You lend 1000 USDT at 3% for 1 month, at the end of the period you will receive 1000 USDT + 3% (30 USDT) = 1030 USDT. In case you lend 1000 USDT at 3% for 5 months – you will still receive 1030 USDT by the end of the Loan, since the interest rate is set for the whole period.

For the Borrower.

You choose to borrow 1000 USDT for 1 month at 3%, this means that at the end of the period, you will need to repay 1030 USDT despite the fact that you may have repaid the Loan earlier (in two weeks, for example). In case you borrow 1000 USDT at 3% for 5 months – you will still need to repay 1030 USDT by the end of the Loan, since the interest rate is set for the whole period.

You set the terms!

What is the APR?

Annual percentage rate (APR) is the yearly interest applicable to the Contract.

What Loan durations are available?

Loan durations start from 1 month to 12 months.

Can I get more than one Loan at a time?

You can have no more than 20 active Contracts to Borrow and an unlimited number of Contracts to Lend. You can find the information about your remaining number of contracts in the "Dashboard".

What happens if the price of the Collateral decreases?

The Borrowers will be alerted about the price decrease, the information will also be available on the Contract summary page. To bring a Loan back to the original Loan-to-value ratio, a Borrower shall:

  • Deposit additional Collateral
  • Proceed with a Full or Partial Repayment of the debt

What happens if the price of the collateral increases?

Any gain in the value of Collateral is Borrowers to keep. The Borrower only ever owes the Loan amount, which is pre-determined and not affected by the price of Bitcoin.

What happens if I fail to repay my Loan? What is Forced Liquidation?

Forced Liquidation (5% fee applies) – applies if Bitcoin's price fluctuations affect Collateral and the LTV ratio falls below what is agreed in the Contract, and meanwhile, there have been no attempts from the Borrower to either increase the Collateral amount or repay part of the debt to keep the LTV ratio at the required level. In case the LTV ratio has dropped to 90% – both the Lender and Borrower will be informed about the start of a Forced Liquidation procedure. In this case, the Contract will be terminated, and the Collateral will be transferred to the Lender. If the amount locked in the multisig escrow address is greater than the outstanding debt – the difference will be refunded to the Borrower.

Another reason for Forced Liquidation (5% fee applies) – is the inability of the Borrower to repay the debt. In this case, after the Contract period ends, and there were no attempts from the Borrower to repay the debt within 24 hours, the Collateral will be liquidated in favor of the Lender.

What is a Margin Call?

A margin call occurs when the value of the Collateral falls below the value that the Contract requires.

The Borrower will be informed about price fluctuations and a falling LTV ratio in advance via email.

For DAI, USDP(PAX), USDC and USDT deals you will be alerted as follows:

  • 75% LTV: 1st Margin Call
  • 80% LTV: 2nd Margin Call (the possibility exists to increase Collateral or partially repay the outstanding debt in order to keep the LTV ratio at the required level)
  • 85% LTV: 3rd Margin Call (the possibility exists to increase Collateral or partially repay the outstanding debt in order to keep the LTV ratio at the required level)
  • 90% LTV: Forced Liquidation alert

For L-BTC Liquid and WBTC deals you will be alerted as follows:

  • 84% LTV: 1st Margin Call (it is possible to increase Collateral or partially repay the outstanding debt in order to keep the LTV ratio at the required level)
  • 86% LTV: 2nd Margin Call (it is possible to increase Collateral or partially repay the outstanding debt in order to keep the LTV ratio at the required level)
  • 88% LTV: 3rd Margin Call (the possibility exists to increase Collateral or partially repay the outstanding debt in order to keep the LTV ratio at the required level)
  • 90% LTV: Forced Liquidation alert

How much time do I have to react to a Margin Call alert?

Until the ratio reaches 90% LTV. After the LTV ratio reaches 90% – the Contract will be transferred into the Forced Liquidation stage, and the Collateral will be automatically liquidated. No amendments or payments will be allowed after the Contract enters the Forced Liquidation stage.

Does Borrowing affect my credit score?

No. Lend at Hodl Hodl does not perform credit checks or KYC when evaluating Borrowers.

Are there any Origination or Prepayment fees? What fees apply?

The Origination fee is calculated from the initial Loan amount and varies from 0.5 to 1.5% depending on the contract period.

  • 1 day: 0.5%
  • 1 week - 5 months: 1%
  • 6 months - 12 months: 1.5%

The Loan principal and interest can be paid down at any time and without penalty.

A 5% Collateral Liquidation fee is calculated from the initial Loan amount in the case of Forced Liquidation.

What is Early Repayment and Partial Repayment?

Early Repayment: If the Borrower wishes to unlock the Collateral from escrow before the lending term is over, it is possible to make an Early Repayment. No additional fees apply. In this case, Borrower transfers the debt amount to the Lenders repayment address specified in the Contract. Lender confirms the receipt of the entire debt amount and releases the Collateral from escrow.

Partial Repayment: If the Borrower wishes to lower a debt burden or the amount of Collateral required, it is possible to repay a part of the debt at any time and without additional fees. In this case, the Borrower proceeds with the payment to the address specified in the Contract. Minimum Repayment amount – 10 for DAI, USDP(PAX), USDC and USDT, and the equivalent for L-BTC Liquid & WBTC.