Introduction

HodlHodl is a platform renowned for its peer-to-peer (P2P) non-KYC Bitcoin trading. In addition to this service, HodlHodl also offers a lending platform where users can leverage their Bitcoin assets to receive U.S. Dollar-denominated loans in the form of stablecoins. This guide will walk you through the steps to utilize HodlHodl's lending services, discuss the potential reasons for using the platform, highlight the benefits and trade-offs, and address any risks associated with P2P lending.

Prerequisites

Before using HodlHodl's lending platform, you should have a basic understanding of Bitcoin transactions. If you're new to Bitcoin, consider familiarizing yourself with basic wallet functions. For this guide, you will also need to know how to use the Green Wallet from Blockstream as it supports the Liquid Network, a Bitcoin sidechain that enables you to use assets like stablecoins.

Important Considerations

• Why use HodlHodl Lending? It allows you to borrow cash without selling your Bitcoin, avoiding potential capital gains taxes.
• Risks for Bitcoin as collateral: The volatile nature of Bitcoin may require you to add more collateral if its value drops or face liquidation if it falls too close to the loan value.
• Be conservative: If leveraging a loan, use only a small percentage of your Bitcoin due to its price volatility.
• Speculative use: Borrowing against Bitcoin to buy more Bitcoin is risky and could lead to significant losses if the market turns against you.
• For Lenders: The platform provides a backstop by triggering liquidation to protect lenders if the collateral falls in value.

Getting Started

1. Sign Up: Go to HodlHodl's website and sign up with an email address; no KYC is needed.
2. Navigate the Platform: Familiarize yourself with the dashboard, including sections like "My Contracts," "My Offers," and the lending tabs.
3. Create a Wallet: Set up a Blockstream Green Wallet and enable the Liquid Network sidechain to receive stablecoin loans.

Accepting a Pre-Made Offer

1. Find an Offer: Browse the available lending offers on the platform.
2. Select an Offer: Pick an offer that suits your needs and click on it to view the details.
3. Input Information: Provide a payment address for receiving the loan and a refund address for the Bitcoin collateral.
4. Deposit Collateral: Send the required Bitcoin amount to the provided escrow address.
5. Receive Funds: Once the collateral is confirmed, wait for the loan to be sent to your wallet.
6. Repay the Loan: Before the contract's end, repay the loan amount plus interest to the specified address. You can make full or partial payments.

Creating Your Own Offer

1. Select Offer Type: Choose whether you want to borrow or lend on the platform.
2. Set Loan Details: Specify the loan amount, the currency (e.g., USDT on Liquid), the interest rate, and the loan duration.
3. Determine Collateral Requirements: Decide on the Loan-to-Value (LTV) ratio, balancing the amount you're willing to lend against the required collateral.
4. Set Availability: Indicate when you're available to respond to takers of your offer.
5. Create the Offer: Once all details are finalized, create the offer to make it available to other users. You can opt to make the offer public or share it privately.

Loan Repayment

1. Access the Contract: From your dashboard, view the contract in progress.
2. Make Repayment: Send the repayment to the provided address.
3. Provide Transaction ID: After sending the repayment, submit the transaction ID or link to a block explorer to the contract.
4. Confirm Completion: Once the repayment is confirmed, the contract will be marked as completed, and your collateral will be refunded.

Additional Information

• Escrow Data: Download escrow data for security in case HodlHodl is no longer operational.
• Communication: Use the chat functionality to communicate with the counterparty if needed.
• Notifications: Stay informed through browser notifications and email updates on the contract's progress.

Conclusion

HodlHodl's lending platform is a useful tool for those looking to borrow against their Bitcoin or lend out stablecoins for interest. By following the steps outlined in this guide and adhering to the best practices for risk management, users can effectively navigate the P2P lending environment on HodlHodl.

Always remember to conduct thorough due diligence and consider the associated risks before engaging with any lending or financial service.