Hodl Hodl P2P Exchange Review 2021

Hodl Hodl is a peer-to-peer platform that operates globally in its own unique way and is an alternative to other p2p platforms such as Paxful, Remitano, Bitzlato, CoinCola, LocalBitcoins, Vertex and others. It is run by Hodlex Ltd. The platform allows users to trade Bitcoin directly between each other. It is a non-custodial exchange meaning that they do not hold users’ funds. Instead, Hodl Hodl uses a multisig escrow to reduce the risk of fraud.

Non-custodial platforms such as Hodl Hodl tend to face less stringent regulations since they do not hold customer funds and trades on the platform take place between users’ wallets. For instance, each time that a contract is created between two entities on the Hodl Hodl platform, a multisig escrow Bitcoin address is generated. What then happens is that once the seller sends Bitcoin from their wallet to this account, the Bitcoin is locked in escrow, and the buyer then needs to send payment to the seller so that the seller can then release the locked Bitcoin from escrow using the payment password so that the buyer can then receive the Bitcoin into their wallet. 

A trade is initialized on the Hodl Hodl platform if a user’s offer is accepted by another user or if a user accepts an offer created by another user. If a user does not wish to display an offer in the public offer list, they can simply mark the offer type as private when creating it. An added advantage of using such a platform is that KYC is not strictly enforced. Following the offer being created, a price is locked. The price can also be edited manually. The price can either be fixed or is often tied to one of the available exchanges and therefore is prone to fluctuations. Regardless, the price of the digital currency cannot deviate more than 30% from the market rate. This rule does not apply to offers made privately. In the case that the Bitcoin price on an offer deviates more than 30% from the market rate, Hodl Hodl removes the offer from the offer list. 

Hodl Hodl also offers its users attractive fees with a maximum fee as low as 0.3% per trade. For high volume traders, Hodl Hodl also has an over-the-counter (OTC) trading desk that promises clients same day settlements of secure transactions and 24/7 personalised support. Users of Hodl Hodl can trade from any location and use pretty much any payment method. Some of the available payment methods include Credit Card, Cash Deposit, SWIFT, National Bank Transfer, Crypto, SEPA Bank Transfer, Skrill, Circle, Western Union, WebMoney, Neteller, Moneygram, OKPay, Payoneer, PayPal, Venmo, Moneygram, In person (P2P), Alipay, Zelle, Gift Cards, and more. 

Trading on Hodl Hodl is quite straightforward and trades can be executed quickly. A user can simply create offers on Hodl Hodl or engage in a transaction even with 0 to 6 confirmations. If the user chooses more confirmations, it will simply take longer for Bitcoin to be confirmed. It is strongly advised that people only choose the zero confirmations option when transacting with parties that they absolutely trust or at least verified users. 

Fees

Hodl Hold has different trading fee rates on the platform. For every new registered user, a trading fee of 0.6% applies. This fee is equally split between the parties of the trade so that each ends up paying max 0.3% per trade. Trading fees can be reduced to 0.55% if users recommend others to use the platform. If users decide to KYC and they are verified, their trading fees will be lowered to 0.5%. 

Fees charged are calculated as a certain percentage of the amount of digital currency transferred to the escrow address. A particular contract’s trading fee is determined by the lowest trading fee rate between the two parties.

Strengths 

  • Easy sign up process. Users can simply sign up with an email and get started on their p2p journey. 
  • Hodl Hodl offers a version of their site on the Bitcoin TESTNET where users can practise p2p trading without fear of losing real Bitcoin.
  • Non-custodial platform. 
  • Multiple payment methods.
  • Reasonable fees.
  • Offers 2FA for added security.
  • The platform has a dispute resolution structure in place. Hodl Hodl conducts due diligence and considers terms of trade, payment evidence, chat messages, reputation and other data supplied by the parties in order to try and resolve trade disputes fairly.
  • Users can earn 5-10% of Hodl Hodl’s platform commission from their referrals. 
  • API access that users can embed in open source projects or access with a key.

Weaknesses

  • Multiple offers with the same payment methods are not allowed in the same country unless the offers have at least a 2% price difference. 
  • Offers can be withdrawn after being published at any time. This applies even if the offer has already been accepted by a user. 
  • The minimum amount for entering a trade is 0.001 BTC which some micropayments proponents deem quite high a threshold especially at times when the market value of BTC is at all time highs, but when transaction fees on the bitcoin blockchain are considered this may actual be a reasonable entry threshold into the p2p trading ecosystem. 

Conclusion 

Hodl Hodl is another peer-to-peer marketplace trying to play an enabling role in the decentralised ecosystem of p2p trading by offering blockchain-powered infrastructure to spur adoption of digital currencies, especially Bitcoin. The platform offers its advantages but is also competing with the likes of Paxful, Remitano, Bitzlato, CoinCola, Vertex Market, LocalBitcoins, and other players also offering unique propositions to an ever-growing user ecosystem.

Leave a Reply