Hodlnaut, a top crypto lending and borrowing platform in Singapore, has shut down, suspending all its services, including withdrawals, swaps, and deposits.
The company also withdrew its application for an operating license to provide digital token payment services filed with the Monetary Authority of Singapore (MAS) earlier in 2022.
Why Is Hodlnaut Shutting Down?
Hodlnaut’s team announced that the shutdown was necessary “due to recent market conditions.”
This is in reference to the ongoing “crypto winter,” in which the values of many cryptocurrencies have been wiped out. The so-called crypto winter has induced many reactions, including panic selling, especially by retail investors who may comprise a major part of Holdnaut’s users.
With other financial pressures worldwide, such as rising inflation and massive energy bill increase, it’s likely Hodlnaut faced a wave of withdrawals by those lending their assets on the platform, and the shutdown could be a way of preventing the company from going bankrupt.
It is also possible that Hodlnaut simply does not have sufficient assets for users to withdraw, potentially exacerbated by impermanent loss. This is a situation in which funds deposited to provide liquidity lose value due to a market crash. For an individual investor, it’s hard to take, but those losses are multiplied for an institution and investment platform.
What Happens to Hodlnaut Users’ Funds?
The first concern regarding the Hodlnaut…
