By mid of 2019, economists were predicting more retrenchments and fewer job vacancies in Singapore. The city-state hardly got some time to recover from the slowing GDP growth that year when COVID-19 hit. Today, not just Singapore, but the entire world is faced with an unpredictable job market amidst global economic shutdowns due to the prolonged pandemic. The coronavirus outbreak triggered mass layoffs in big and small companies all over the world.
The importance of passive income has always been well known but in the past two years, it has become even more clear that we all need additional sources of income as a safety net and for emergencies.
There are multiple ways of earning passive income but as we approach the digital decade in the 4.0 era, digital currency has started to see an increase in adoption with cryptocurrencies emerging as remarkably resilient assets during global economic meltdowns.
We spoke to Sten Ivan, head of growth at crypto interest-earning platform Hodlnaut to explore more on this.
Earning passive income with cryptocurrency in Asia: Scope and challenges
Sten believes that with the increase in adoption of crypto-related activities evidenced by financial giants such as PayPal and Mastercard, it shows that the use of digital currencies is slowly becoming more acceptable and will soon be mainstream. Moreover, DeFi and the blockchain technology behind cryptocurrencies have an abundance of use cases besides just being a mode of payment. This means that there are tons of opportunities for growth we have yet to see in the space.
“Inflation is also a very common aspect when it comes to fiat money. But with cryptocurrency, the chances of inflation are minimal — and even none. With a fixed supply of Bitcoin in circulation, users who hold Bitcoin would not need to worry about an increase in the supply of the currency, which in turn, will not devalue the asset. All these aspects make cryptocurrency a viable choice for users to earn passive income in,” he adds.
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Cryptocurrency as an ideal avenue for passive income makes even more sense for Asia where trends like a rising middle class and increasing smartphone and internet usage are driving digital trends.
According to a study by Messari crypto researcher Mira Christanto, six out of the top ten cryptocurrency unicorns are located in Asia. Plus, around 98 per cent of ethereum-based futures and 94 per cent of bitcoin futures volumes stem from the region.
However, there are several common fears associated with cryptocurrency that might lead to hesitation and doubt. In a survey done by Encrybit The Future of Exchange, 40 per cent of respondents considered security to be the most problematic while 33 per cent considered lack of customer support as the main challenge. Extreme price swings and market volatility are also common challenges faced by crypto traders.
Changing the crypto game for a better, brighter future
Singapore-based crypto lending platform Hodlnaut is stepping up to help provide financial services for individual investors allowing them to safely earn interest on their cryptocurrencies by lending to vetted corporate borrowers, who would otherwise struggle to access crypto loans.
“Here at Hodlnaut, we always take a security-first approach. We have put in place various security protocols to ensure that users’ funds are safe with us. This includes a two-factor authentication procedure for users before they can deposit,” Sten shares.
To ensure that funds are kept safe, Hodlnaut does not use hot wallets, which are vulnerable to online attacks. “Instead, we use Fireblocks’ multi-party computation wallet infrastructure where each user will be assigned a unique address generated by Fireblocks. On the backend, Hodlnaut will either transfer the cryptocurrencies to our self-custodied cold wallets or lend them to vetted borrowers,” Sten adds.
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Plus, the platform runs on a secure cloud infrastructure on Amazon Web Services (AWS), and all traffic is encrypted with SSL encryption. “We encrypt and anonymise as much data as possible on our servers. We also use industry-standard algorithms for password hashing and procedures,” shares Sten.
Furthermore, users can withdraw funds to only whitelisted addresses, preventing any potential hacks and scams. Hodlnaut also provides an optional Nexus Mutual Custody Cover. Though it is not mandatory, Hodlnaut has put in place this option to provide users with an alternative to safeguard their funds.
Hodlnaut is also certified by the Singapore Fintech Association, a credential recognised by the Monetary Authority of Singapore (MAS). Plus, it is even actively pursuing a license application with the MAS and is currently operating under an exemption.
Maximised benefits and high-interest rates
Hodlnaut offers some of the highest interest rates of up to 12.73%. “This means that users will be able to benefit a lot more when they deposit with us since they will be able to earn higher returns,” explains Sten.
In the Encrybit survey, 37 per cent of respondents considered high trading fees to be the most problematic. Hodlnaut has recently launched a new initiative to waive off any single withdrawal fee per calendar month. As such, users no longer need to pay for the withdrawal fees so long as they withdraw only once a month. This allows them to earn maximised returns since they do not have to pay for the additional withdrawal fee.
Hodlnaut also has a Preferred Interest Payout feature that allows users to earn in the currency of their choice. The feature allows for more flexibility over users’ crypto assets and boosts their annual percentage yield (APY) when they choose to earn in stablecoins since the current APY for stables is much higher (12.73%) compared to BTC or ETH (7.46%).
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Furthermore, with Hodlnaut’s Nexus Mutual Custody Cover, users are able to access custody cover easily, quickly, and conveniently. Users who purchase custody cover will have their assets protected against the following risks:
- The custodian gets hacked and the user loses more than 10% of their funds
- Withdrawals from the custodian are halted for more than 90 day
The feature covers any token or combination of tokens users have in their Hodlnaut account. In case of a claim, users will receive the equivalent of their funds in ETH or DAI up to the covered amount.
Crypto traders can now make money on the go with Hodlnaut mobile apps
Before the launch of their iOS and Android applications, crypto traders would have to log in to Hodlnaut’s website via their computers, tablets, or smartphones. To provide users with more options and better accessibility, Hodlnaut has launched iOS and Android mobile apps making it a whole lot easier for users to access their accounts, manage their portfolios, and earn on the go. This is also in line with mobile usage trends in the region. Reports suggest that most Asian countries have already transformed themselves into mobile-first nations, with smartphone penetration outpacing traditional desktop devices. In Korea, consumers have 57 apps installed on average. Chinese users prefer apps over desktops too.
“Traders can now access features such as Token Swap and Preferred Interest Payout to help them boost their portfolios — and eventually, returns — even when they are out and about. No matter where they are, our users can now earn through our mobile app at (literally) the touch of their fingertips,” says Sten.
Start working towards achieving financial freedom with cryptocurrency today. For more information on how Hodlnaut can help you achieve this goal, visit https://www.hodlnaut.com/ and sign up here: https://app.hodlnaut.com/signup
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This article is produced by the e27 team, sponsored by Hodlnaut
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