Another one bites the dust: lending platform Hodlnaut

[bbc.reporter]

Hodlnaut's problems began when they offered yields if their customers converted to Luna's UST stablecoin to receive yield. What Hodlnaut did was deposit their users' UST to a protocol which was a ponzi called Anchor where the protocol offered up to 19%. Hodlnaut gives their customers 13% and they keep 6% hehehe.

... and now most have ended up not receiving the 13% and not receiving back even their own money.
And I would not be surprised if Hodlnaut has withdrawn their 6% long ago. Because the whole risk goes to the customers (I'm even surprised they've offered such a big part of the profit to the customers).

Anchor as I have already mentioned was a ponzi scheme to encourage stablecoin users to convert their USDT, USDC or DAI to UST and deposit them to the protocol for high yield. Printing more UST also increased the demand for Luna and pumped the price. I reckon the mistake of Do Kwon was not protecting UST's peg when it began falling to $0.98. He waited until UST depegged to $0.90 when everyone has already panicked and withdrew from Anchor.

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[Darker45]

And while Hodlnaut in Singapore in Southeast Asia halted withdrawals, Nuri, formerly Bitwala, operating since 2015, in Germany in Europe filed for insolvency.^[1]

It seems we could create quite a long "Another one bites the dust" series with all these centralized platforms falling one after another.

Signs of risks are everywhere in the wide crypto ecosystem. One crypto exchange falls here, a crypto lending platform falls there, a certain altcoin's wallets got hacked everywhere, a stablecoin company freezing funds, blockchain bridges falling, and so on and so forth.

Amidst all this, a Bitcoin in self-custody in a hardware wallet remains intact and safe.

[1] https://cointelegraph.com/news/german-crypto-bank-nuri-with-500k-users-files-for-insolvency

[suchmoon]

I've put altcoin announcements and HYIP both on ignore quite some time ago and.. I don't know, this may be the reason in your case too?

I mean not just Bitcointalk, but also e.g. ads on news sites. Maybe I just tune them out subconsciously.

[LTU_btc]

I never heard about this platform before. Anyway, not first and, unfortunately, not last such kind of platform turning into scam. Personally, I keep my money away from such lending platforms. Interest that you will get simply isn't worth to risk. Yeah, you can invest $50 or $100, something what you would afford to lose in bad case scenario. But few $ interest that you will get in the end is nothing. To get something significant you have to invest much more, but you must be an idiot to invest there thousands of dollars worth BTC.

[bbc.reporter]

Another victim of Hodlnaut has been discovered. Algorand Foundation has lost $35 milllion in USDC after having exposure in the cryptolender before it suspended withdrawals.

It appears very similar to Celsius where they might not really care about their trustworthiness and reputation to make many stupid investments with their depositors' coins. If they are wrong, they declare bankruptcy and go create their next scam.



The Algorand Foundation has revealed a $35 million USDC hole in its balance sheet as a result of exposure to embattled cryptocurrency lending firm Hodlnaut, which has paused withdraws since Aug. 8.

Source https://cointelegraph.com/news/algorand-foundation-outlines-35m-exposure-to-crypto-lender-hodlnaut

[NeuroticFish]

Another victim of Hodlnaut has been discovered. Algorand Foundation has lost $35 milllion in USDC after having exposure in the cryptolender before it suspended withdrawals.

Oh, yea, yet another piece of the great list of "strong" businesses, built on top of each other like castle of playing cards...
I guess that we have to be happy there's crypto winter now and then to get rid of these before they grow bigger (and make even more damage when they collapse).

[DireWolfM14]

That's correct, but 50$ is an amount people may be playing at the lottery, so trying their luck with whatever HYIP / Ponzi is not that uncommon. Unadvised, yes, stupid, yes, still, not uncommon, not a surprise.

Some dude at work buys $50 worth of lottery tickets every paycheck, 26 times a year.  He and I started researching bitcoin around the same time, I stuck with it, he stuck with the lottery tickets.  Last year when BTC was hovering over $40k he came to me and told me he had calculated what the amount he spent on lottery tickets would have been worth if he had spent that money on BTC instead.  He was beside himself for being so shortsighted...  He's still buying buying lottery tickets instead of bitcoin. 

Some people are so emersed in their "get-rich-quick" dream that even if they come to conclusion on their own that the rug has been pulled out from under them, they'll still cling on.  This guy I'm talking about is no idiot, he readily admits he's spending the money for the dream.  I've tried gently reminding him that Dreaming is Free.

I mean not just Bitcointalk, but also e.g. ads on news sites. Maybe I just tune them out subconsciously.

Yeah, scam adds have already saturated the internet, even on non-crypto related sites.  Wasn't it mycelium wallet that was advertising 1xBit not long ago?  I tend to ignore that stuff, but once in a while it's so outlandish.  Even quality service like blockchair are not immune.

[bbc.reporter]

Another victim of Hodlnaut has been discovered. Algorand Foundation has lost $35 milllion in USDC after having exposure in the cryptolender before it suspended withdrawals.

Oh, yea, yet another piece of the great list of "strong" businesses, built on top of each other like castle of playing cards...
I guess that we have to be happy there's crypto winter now and then to get rid of these before they grow bigger (and make even more damage when they collapse).

Hehe if they want to become similar to banks but their source of profit is from the yields of very speculative Defi tokens, they will certainly never become big. Everything will be over when the bubble pops. What will be head shaking in the cryptospace is these type of services will return and it will again lose millions of users money.

[NeuroticFish]

Some people are so emersed in their "get-rich-quick" dream that even if they come to conclusion on their own that the rug has been pulled out from under them, they'll still cling on.  This guy I'm talking about is no idiot, he readily admits he's spending the money for the dream.

Let's be fair and admit it, he's probably also paying for the adrenalin when the numbers are extracted/picked  
But I totally get your point. Of all get rich quick schemes, I think that the lottery is the worse.

I've tried gently reminding him that Dreaming is Free.

Heh, timeless

What will be head shaking in the cryptospace is these type of services will return and it will again lose millions of users money.

"Rinse and repeat" is many scammers' strategy. And it keeps working astonishingly well in crypto.

[o_e_l_e_o]

Everything will be over when the bubble pops.

The bubble doesn't even need to pop. The latest court documents from Celsius show that they somehow managed to lose enough money as to be insolvent during the massive bull run up to $60k. We can only guess what kind of wild gambles they were making in order to achieve that, considering they could have bought and held nearly anything and made big profits. These companies can collapse at any time, and take all user deposits with them.

"Rinse and repeat" is many scammers' strategy. And it keeps working astonishingly well in crypto.

It's super easy as well. Call it an ICO, DeFi, staking, yield farming, liquidity mining, lending platform, etc. Just come up with a new name and promise risk free profits, and you are guaranteed to get investors. You don't even need to have a working product or income stream.

[DireWolfM14]

Let's be fair and admit it, he's probably also paying for the adrenalin when the numbers are extracted/picked  

Haha, yeah I readily admit that.  I only recently started gambling a little bit (and I do mean a little bit,) and now I know first hand the thrill is real, even if you only have about $2 on the line, lol.  I guess the emotions are piqued the more you "can afford to lose."

Much of the same mentality must apply to the victims of these HYIP scams.  I don't mean to minimize the culpability of the scammers, but lets continue to be fair; if it wasn't for the greedy these scams wouldn't work.

Everything will be over when the bubble pops.

The bubble doesn't even need to pop.

No, a bubble isn't needed.  If it's one thing about crypto I can be certain of; the scammers are always there.  The scams are only more successful during bull markets, and therefore we here about more of them.  They're still lingering in the shadows during a bear market.

[NeuroticFish]

"Rinse and repeat" is many scammers' strategy. And it keeps working astonishingly well in crypto.

It's super easy as well. Call it an ICO, DeFi, staking, yield farming, liquidity mining, lending platform, etc. Just come up with a new name and promise risk free profits, and you are guaranteed to get investors. You don't even need to have a working product or income stream.

Indeed. I would have expected that people start to learn and stop jumping in so eagerly. But, as a recurring topic, it may be somewhat (or at a certain level) related to the gambling mentality so wide spread.

Much of the same mentality must apply to the victims of these HYIP scams.

Yep, at least it applies to those chipping in a few dollars "just in case". But I fail to understand how can some put there life changing amounts or at least money they don't afford to lose. Those I pity. Those should stop doing this/falling for this.

[o_e_l_e_o]

I think the gambling analogy is a good one. I thought for some time that these scams worked exclusively on newbies. That once you had lost all your money on one shiny new shitcoin or shiny new centralized platform, that you would learn your lesson and just stick to holding bitcoin in your own wallet in the future. But then with the collapse of platforms like Celsius and Voyager, I spent a bit of time on Twitter and Reddit reading about what had happened to these platforms. And over and over again I saw users wishing how they had just stuck to BlockFi or some other platform, somehow completely oblivious to the fact that every single one of these platforms has the exact same (lack of) business model, and every one is just as risky as the others. I saw people who had lost everything with the collapse of Luna talking about the next "bitcoin killer" or "ethereum killer" they were going to buy.

It is very much akin to gamblers chasing their losses. It is highly destructive behavior, and no amount of pointing out just how shady or outright scammy all these projects are seems to make any difference to these people.