Hodlnaut is Too Flawed to HODL – Here’s Why

Singapore-based decentralized crypto lending platform Hodlnaut might be the next to crumble as a result of the LUNA fiasco.

3AC, BlockFi, Voyager and Celsius were all the prelimnary dominos that tumbled following the LUNA fallout, and Hodlnaut might soon be next on the list.

In an article published by Dirty Bubble Media, it was revealed that Hodlnaut appears to have suffered severe losses during the fallout.

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Blockchain data shows that the company sent US$171 million in UST to FTX on 11 May 2022 as Terra depegged from the US dollar. An additional 138 million UST was also sent to FTX by another address linked to Hodlnaut’s wallet:

• 0x15b7ccd728d7cf4d29e2944c8e254a3e86a34b661b3551be82ea5cba94c71ade (49,999,933.305061 UST)
• 0xe7339244220b6bbb2a2677d129b42f1761f8fa3ad26883aad457f840cc0d8fae (120,913,170.122171 UST)

UST’s price crashed from US$0.69 to US$0.19 during these transactions.

Furthermore, Hodlanut is believed to be one of the largest liquidity providers of UST to UST 3crv pool on Curve, as well as being one of the biggest depositors in the Anchor protocol.

Dirty Bubble Media believes Hodlnaut used clients’ money to deposit into Anchor to earn 19.5% yield whilst returning their users 8-13%.

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Hodlnaut claimed to have US$500 million AUM at the start of 2022. Losses incurred from Terra could amount to at least 10% of this figure.

Juntao Zhu, Hodlnaut’s co-founder, further revealed on Twitter that the platform has seen US$150 million in user withdrawal transactions over the past two weeks, which approximates to a net outflow of 35% of the platform’s assets under management. Over 90% of these withdrawals are from retail investors.

Zhu has vowed to not halt withdrawals despite these outflows and “hopes that the industry would do the same” whilst clarifying that Hodlnaut had no exposure to 3AC.

Blockhead has reached out to Hodlnaut for a comment but has not heard back.