Many cryptocurrency investors are no longer satisfied with simply storing their cryptocurrencies in a wallet, but want to leverage their crypto holdings to earn extra income. This is reflected in the growing popularity of decentralized finance protocols as well as cryptocurrency lending companies. Today, we’ll be taking a look at YouHodler, a company that has built out a comprehensive selection of products that open up new possibilities for cryptocurrency holders.
Before we describe the different services offered by YouHodler in more detail, let’s first learn some basic information about the platform and its most apparent pros and cons.
YouHodler was established in 2018, and is led by Ilya Volkov (CEO). The company is a member of the Crypto Valley association in Switzerland, but it also has operations in Cyprus, giving it access to the European Union market. In addition, YouHodler leverages the Ledger Vault cryptocurrency custody technology, which comes with a $150 million pooled crime insurance policy.
On YouHodler, cryptocurrency holders can either use their crypto as collateral to take out loans, or simply deposit their cryptocurrency in the YouHodler Wallet to earn interest on a weekly basis. These are the basic features of the platform, but as you’ll see further below, YouHodler’s suite of services extends much further.
- Supports a large variety of cryptocurrencies
- Users have a lot of flexibility when setting up a loan
- The »Earn Interest« product can be a solid source of passive income for crypto holders
- Uses Ledger Vault technology to secure deposited cryptocurrencies
- Help section does a good job explaining the company’s products and most commonly asked questions
- YouHodler is not a DeFi service, so KYC is mandatory
- Not available in all countries – the United States and some other countries are restricted
A closer look at YouHodler
Now, let’s take a closer look at the most important aspects of the YouHodler platform and describe its main services in more detail.
Which cryptocurrencies does YouHodler support?
YouHodler has integrated a pretty big selection of cryptocurrencies that can be used as collateral for loans or earn interest when deposited into the YouHodler Wallet. Over 20 different cryptocurrencies are supported on both the lending and borrowing side of YouHodler’s offering. You’ll find most of the large market cap cryptocurrencies, with some smaller altcoins sprinkled in for good measure. Here’s a few examples:
- Binance Coin
The company is also steadily implementing new cryptocurrencies on its platform – for example, YouHodler says it’s planning to add coins like Cardano, Ethereum Classic, Monero, Tezos and TRON.
Instant crypto loans
Instant crypto loans are one of the main aspects of YouHodler, and the premise is pretty simple – you can use your cryptocurrency as collateral to take out a loan in the form of fiat currency. This can be useful for those who want to hold on to their crypto but would like quick access to cash.
When taking out a loan from YouHodler, users have several options – the money can either be withdrawn to a bank account using a SEPA or SWIFT transfer, or to a Mastercard/Visa credit card. The funds can also be kept on YouHodler and exchanged for stablecoins or cryptocurrencies via the platform’s exchange feature.
The loans are quite customizable, depending on the user’s specific needs. There’s 3 main loan plans, which are primarily differentiated by their loan-to-value (LTV) ratios. A loan’s LTV ratio tells you how much fiat currency you can loan compared to the value of the cryptocurrency that you’re putting up as collateral. Here’s a rough example to illustrate what LTV means – if you use $10,000 worth of Bitcoin to take out a loan at a LTV of 70%, you can borrow up to $7,000.
YouHodler offers loan plans with 3 different LTV ratios: 90%, 70% and 50%. The higher the LTV ratio is, the sooner you will have to repay the loan. However, it’s worth mentioning that loans can be extended by paying a fee.
Loans on YouHodler offer quite a few customization options, making the platform very flexible. For example – under certain market conditions, users have the option of borrowing more fiat without having to provide any additional crypto collateral. There’s also the option of using the value of the collateral, alongside a fee, to instantly close a loan. This feature can be very useful if the value of the cryptocurrency increases significantly after you use it as collateral to take out a loan.
Of course, the cryptocurrency market is known for its volatility, and platform’s like YouHodler need to have sistems in place in order to mitigate risk. Every crypto-collateralized loan facilitated by YouHodler comes with a price-down limit (PDL).
This is the price level at which the cryptocurrency used as collateral will have to be liquidated by YouHodler. In the event that the PDL level is triggered and the collateral is liquidated, the loan is considered as completed and the user doesn’t have to make any payments to YouHodler. Users who want to avoid the PDL being triggered can supply additional collateral, but the availability of this option will depend on market conditions.
Earn interest on cryptocurrency holdings
On YouHodler, it’s possible to earn weekly compound interest payments for depositing cryptocurrency to the platform’s wallet. It’s similar in principle to a crypto savings account, but this feature provides a lot of flexibility, as users can withdraw their cryptocurrency whenever they please.
Among all the supported assets that users can deposit, the best rates are available for stablecoins – this is in line with industry standards. By depositing stablecoins, users can currently earn over 10% a year. At the moment, the best rate (12.7%) is offered for users depositing the USDT stablecoin.
You can also deposit non-stablecoin crypto assets. While the interest rates are lower, they can still be substantial and YouHodler can be a viable alternative to simply holding cryptocurrencies in your own wallet. For example, the current annual interest rate for Bitcoin deposits is 4.8% at the time of writing.
Of course, conditions in the cryptocurrency market can change quickly, which can translate to fluctuations in the offered rates. The best way to keep up with the available rates is to go to the official YouHodler website.
Advanced users can take advantage of Turbocharge and Multi HODL
The crypto-backed loans and interest-earning products offered by YouHodler are pretty straightforward, but the platform also caters to users who want to try and maximize profits through some more advanced strategies.
The first product we’re going to talk about is Turbocharge, which is essentially a way of getting leveraged exposure to cryptocurrencies. In Turbocharge, the YouHodler system creates a »cascade« of loans, where the funds obtained from an initial loan are then used to buy cryptocurrency. Users can elect to repeat this process several times to effectively increase their leverage.
Turbocharge gives users the option to increase their cryptocurrency holdings, provided the price of the cryptocurrency they’re using as collateral is increasing. If the market is dropping, however, losses can pile up fairly quickly, depending on how much leverage is being used. This product will primarily be of interest to users that don’t mind taking on more risk for a chance at amplified profits, and is primarily designed for those that want to take advantage of bullish periods in the cryptocurrency market.
The second product for more advanced users is called Multi HODL, which has some parallels with Turbocharge. However, MultiHODL isn’t just for those who predict a bullish trend in the market, as it can also be used to go short on a cryptocurrency. MultiHODL is YouHodler’s alternative to futures contracts and crypto CFDs, which are quite popular amongst cryptocurrency enthusiasts. It offers leverage of up to 30x, which should be plenty enough for most traders.
YouHodler’s built-in exchange
YouHodler features a cryptocurrency exchange feature that facilitates trades between the different cryptocurrencies and fiat currencies supported by the platform. YouHodler’s exchange can be used to buy/sell cryptocurrency with fiat currency, making it a solid way to enter the cryptocurrency market or cash out some profits. While YouHodler’s integrated exchange can’t quite compete with dedicated cryptocurrency exchanges, it’s still a very welcome feature that should prove convenient for many YouHodler users.
YouHodler uses Ledger Vault, which is a cryptocurrency custody solution created by Ledger, the company that made a name for itself with its hardware cryptocurrency wallets. Crypto assets that are held with Ledger Vault are covered by a $150 million pooled crime insurance policy, and this also covers the funds stored by YouHodler.
The company has also partnered with prominent blockchain forensics firms Elliptic and Ciphertrace in order to monitor potentially suspicious blockchain activity and protect the platform from risks posed by money laundering and other illegal activities.
YouHodler has created an appealing platform that caters to cryptocurrency investors’ desire to do more with their holdings. Its crypto-backed loans feature distinguishes itself with a lot of flexibility, and provides a nice selection of different LTVs as well as other customizable parameters. The interest that YouHodler offers on cryptocurrency deposits is competitive with the rest of the industry, particularly when it comes to stablecoins. YouHodler also realizes that there’s more to cryptocurrency than just Bitcoin and Ethereum, and the platform supports a nice variety of cryptocurrencies. However, it’s important to note that it’s impossible to make a profit without taking on some risk, and those who are not comfortable with depositing their cryptocurrencies with a third party might not be interested in a platform like YouHodler.