Editorial Review

YouHodler Review: Making Strides but is it Enough?

A 12% return on stablecoins is higher than most in this space, but YouHodler has a few questions to answer before becoming a safe bet.

May 1, 2020

YouHodler Loan Review

YouHodler Logo

YouHodler Crypto Loan

4.8 Editor's Rating
on YouHodler's website
APR
3-7.5%

YouHodler Crypto Loan

4.8 Editor's Rating
Availability
Unavailable in: China, Iraq, Bangladesh, Pakistan
Loan details

KYC required

Loan-to-value: 50-90%

Terms: flexible

Security
4.0
Collateral accepted

BTC

ETH

XRP

Loan Details

  • Interest rate: Not advertised, although a screenshot in the FAQ section of the site lists the interest rate at an extremely high 20%.
  • Monthly payment: None
  • Repayment period: 180 days, 60 days, 30 days
  • Service fee: 7.5%, 5%, 3%
  • LTV rates: 50%, 70%, 90%

Liquidation Risk

There is a high liquidation risk when you chose to take out a loan using YouHodler. The company choses to go by their Price Down Limit, which is similar to other companies except its much more stringent. The PDL changes based on your LTV, the higher the LTV the higher your PDL, essentially increasing your risk when you put up less collateral. When your collateral value hits your Price Down Limit, YouHodler liquidates your collateral automatically. At a 90% LTV, your PDL will be a 5% decrease in collateral value. Cryptocurrencies decreasing 5% happens literally every day. At a 50% LTV, the PDL drops to a manageable 40%. 40% swings don't happen very often over the course of one day, but they can certainly happen quickly and suddenly if you aren't paying attention.

Timing

All loans appear instantly in your wallet section of the YouHodler website and can be withdrawn to fiat using any VISA or Mastercard.

Supported Currencies

You can take out loans in the following fiats:

  • USD
  • EUR
  • Stablecoins (Note: To take out a loan in stablecoins you must first take out a loan in fiat and then convert to a stablecoin of your choosing. YouHodler's stablecoin offerings include: USDT, USDC, PAX & TUSD)

In order to take out those loans, you will need to post collateral using the following assets:

  • Cryptocurrencies: BTC, ETH, BNB, PAXG, XRP, XLM, BCH, LTC, BSV, DASH, EOS, and LINK.
  • Tokens: BAT, and REP.

What YouHodler Does Well

Differentiation from the Competition

YouHodler has an interesting feature called Turbocharge which offers customers a way to take out more loans with their original collateral. What happens is you select your LTV value, either 70% or 90%, and the number of cascading loans you'd like to take out (3-10). A cascading loan takes the fiat that was lent to you in the first loan to buy collateral for a second loan. This process happens 3-10 times depending on your risk level. Remember the same rules apply as a regular loan, namely if the PDL hits a certain point, all of your loans are liquidated. At 70% LTV, the PDL is 25% and at 90% LTV, the PDL is 5%.

Why You Might Want To Choose Another Service

Fiat Withdrawal Restrictions

There are a great many withdrawal restrictions when it comes to actually using the fiat that YouHodler lends you. You can only withdraw fiat to a VISA or Mastercard, no gift cards or prepaid cards.

You can't withdraw more than $2,500 at a time, no more than $4,800 in a day, and no more than $20,000 in a month.

You can't withdraw at all if you have a U.S. bank, or any number of other countries. All an all, there are many more countries which CAN'T receive the payouts than CAN receive them.

Hidden Fees

If you use YouHodler, expect to receive a great number of fees:

  • 5% withdrawal fee for fiat
  • $3 withdrawal fee for stablecoins
  • Service fee + 1% to extend your loan
  • 0.5% fee to add more collateral
  • 1% to close your loan prematurely (0% fee on MultiHODL loans)

There may be no monthly payments, but YouHodler seems to have found a way to make up for it by charging you whenever you want to do something.

No P2P Marketplace

Many of YouHodler's competitors offer customizable loans in a P2P marketplace where you can set youself up as either a borrower or a lender. These features give borrowers a lot more flexibility and also allows lenders to chose loans they feel most comfortable with. There is none of that at YouHodler. You only have three choices really, and one of their choices (90% LTV with a 5% PDL) isn't really a viable option unless you are looking for a one-day loan.

To Wrap It Up

YouHodler's loan service is rigid with many constraints that might deter you from opting into their program. You can't take a loan out through YouHodler if you live in the U.S.A. (as well as a great deal of other countries). You can only choose between the three options YouHodler gives you. You can't take a loan out for more than six months without receiving a fee. All and all, it seems like YouHodler still has some work to do in order to really get competitive with some of the other offers out there.

YouHodler Company Review

Business Background

YouHodler is owned by a company called Naumard Limited which is registered under the laws of the Republic of Cyprus. Not much can be found on Naumard Limited online, except for this site which claims Naumard was founded in 2016 and has 2 employees located in their Cyprus location. This is probably due to the fact that YouHodler has two corporate locations, one in Cyprus, the other in Switzerland. The majority of their business operations are probably handled there.

KYC Policies

In order to activate YouHodler's features you must fill out the standard forms. You will need a photo ID, a picture of you holding the ID, your name, mailing address and phone number. All this information is sent to a company called Identity Mind Global (IMG). IMG specializes in compliance for virtual currency companies and also partners with Binance.

Two-Factor Authentication is available albeit not highly advertised. Navigate yourself to the profile tab to activate this important function.

Service Fees

Fiat withdrawal fees amount to 5% for VISA and Mastercard. Transactions are instantaneous. One point YouHodler makes over and over again on their website is that if you withdraw funds before interest is paid out for that month you lose out on all of it. Pretty straight forward but it's something they emphasize many times.

YouHodler charges an origination fee for creating a MultiHODL account. YouHodler also charges a share-profit fee on their MultiHODL accounts only if you decide to withdraw your funds at a profit. YouHodler charges nothing if you withdraw at a deficit.

There are withdrawal fees for LINK (1 LINK), BAT (10 BAT) and REP (0.2 REP).

All stablecoins cost $3 for each withdrawal.

UX

On the website, the interest-bearing account meshes seemlessly with the other features of YouHodler. You can transfer funds around, exchange currencies and track price changes all on one screen. Everything seems to be completely operational and YouHodler's affiliated help site organizes information well. You can follow YouHodler's blog for company updates as well as opinion pieces from YouHodler employees. They recently rolled out their mobile app for Apple and Android phones so you can now access you interest bearing account on your phone.

What YouHodler Does Well

Improvement

YouHodler has made some large improvements in recent months, mainly the addition of some key asset support and the inclusion of some legal documents and site policies which were missing before. Providing improvements and attempting to supply a superior product is an indication of the company's dedication to its customers. These signs of improvement beg the question, where will this company be a few months from now?

Customer Service

YouHodler has a chat room available which can connect you with a live agent within minutes.

Why You Might Want To Choose Another Service

Data Breach

YouHodler was involved with a very serious data breach in 2019. YouHodler had an unsecured database of sensitive client information which could have been compromised by others. YouHodler insists that no data was stolen but that is irrelevant as they were careless with customer information. If privacy is important to you, you may want to find another service.

No Insurance

YouHodler doesn't offer its customers traditional insurance on their deposits, instead opting to cover losses with their own insurance fund of $1 million.

Legitimacy

Despite making some great strides recently towards improving their legitimacy, YouHodler still has some work to do. They claim to be a Swiss-based company, when in fact YouHodler is registered in Cyprus. Cyprus is basically the Cayman Islands of the EU and is a hotbed for money laundering and other criminal money servicing.

Perviously, YouHodler wasn't very transparent with their business background. Now you can find their appropriate legal documents directly on their homepage. YouHodler has posted their company registration number, a few legal opinions prepared by C.Samir & Co, all of their privacy/KYC policies and their various organizational memberships.

YouHodler is a member of the BlockChain Association and the Financial Commission, not to be confused with the more popular Blockchain Association.

To Wrap It Up

A lot of questions arise from this brief research. What happens if YouHodler suffers loses of more than $1 million? Is the BlockChain Association and the Financial Commission's name purposefully misleading? Why do they claim to be a Swiss-based company? How much risk is associated with registering a company in Cyprus? These are questions that ought to be answered before using YouHodler.