Bitcoinist caught up with Max Keidun and Roman Snitko, CEO and CTO of HodlHodl, whose peer-to-peer bitcoin trading platform and exchange just secured a private funding round from some notable members of the Bitcoin community.
We’re …happy to be raising money from bitcoiners, and not VC funds
– Hodl Hodl CEO
Bitcoinist: Why did you decide to hold a private funding round? Was the target achieved?
Hodl Hodl: Yes, the target was achieved. We decided to hold a funding round because the project has been self-funded for 2 years and we needed to continue working an delivering new features faster. External funding helps with that.
Also we don’t think that public funding is good in our case, because we don’t want to issue any tokens and we are against ICO. We’re also very happy to be raising money from bitcoiners, and not VC funds because our investors understand our project much better and have similar values.
Bitcoinist: Why did some notable members from the Bitcoin community like WhalePanda (and others) decide to invest in this project?
Hodl Hodl: Here are some direct comments from our investors.
Because there needs to be a place where people can buy and sell their Bitcoin without any KYC/AML. Localbitcoins used to be a good place to do that, but that changed after they implemented KYC. There’s also obviously a big market for it, just look at localbitcoins volume. I’m also a big fan of househodl personally since I’ve been looking into buying real estate with Bitcoin.
Hodl Hodl is aldready an excellent platform leveraging the strong technical baseline of BTC. I share the teams excitement about building a decentralized marketplace that aims to be the preferred solution for p2p trades and futures with maximum security and privacy in mind.
Because investment opportunities like this are very rare. Investing into an exchange with good tech, which is good for the ecosystem, at this valuation, is a no-brainer.
Bitcoinist: What will the funds be used for primarily?
Hodl Hodl: Development and delivering new features. Currently, we are developing our OTC business line by onboarding more and more OTC partners. Also, we are developing a prediction contracts market. We will spend some raised funds on hiring new developers, adding new languages (Spanish and Japanese are coming to Hodl Hodl in December), and some marketing efforts.
Of course, we will continue developing Househodl, some funds will definitely go that way.
Bitcoinist: When will you launch your prediction (futures) contracts market? Considering the relatively tepid demand for CBOE Bitcoin futures right now, how much interest have you seen for this product?
Hodl Hodl: We’re thinking of launching prediction contract markets in February 2019. We see a huge demand for this product as it will be fully non-custodial (so no centralized storage of funds), and we – as a platform – won’t be able to affect this market. This will be pure P2P.
Bitcoinist: You’ve recently announced your non-custodial OTC trading desk. Who is this service targeted for?
Hodl Hodl: The OTC desk was, essentially, made for large OTC traders, performing trades from 50BTC and more at a time. Our brokerage arm – an Estonian company called “Tenbagger” – is a fully licensed EU broker. Large deals on our OTC desk go through it and if both parties desire so (which they usually do) they provide all the necessary KYC/AML information.
By having our own brokerage company we can trade directly with other OTC desks, but also we are matching traders that can use Hodl Hodl as an escrow platform to trade in a secure and easy way.
Usually, OTC traders contact us and then we help them with onboarding and support. We work with different volumes, payment methods, and we can help buy or sell BTC [coin_price] and other cryptos.
Bitcoinist: Can you give us a sneak peek of your Househodl service? Why would someone want to use this platform to buy/sell a home?
Hodl Hodl: Our real estate platform HouseHodl will allow users to list real estate properties, sign all related documents remotely, and buy and sell real estate via cryptocurrency escrow accounts.
Using cryptocurrency as a payment method, we will help crypto investors connect with real estate agents directly without the involvement of banks. Cryptocurrency owners won’t need to cash out to fiat currencies, and real estate sellers won’t have the hassle of entering into crypto markets. Cryptocurrency payments are cheap, fast, reliable, work 24/7, and minimize additional KYC/AML beyond what’s necessary.
Further, our users will be able to make all payments remotely without opening bank accounts. Moreover, people facing problems with transferring large amounts of funds abroad or with opening accounts in other countries will no longer be required to do so, as they make all payments via Bitcoin’s blockchain.
Househodl will use same escrow tech that is currently working on Hodl Hodl. We plan to launch it in 2019.
Bitcoinist: Can you share any figures? What kind of trend are you seeing when it comes to the growth of your platform?
Hodl Hodl: We usually post all our figures in our blog post. Our volumes since February been more than 2,000 BTC traded (both retail public offers and OTC private offers) in more than 800 trades. Also, keep in mind that we only went out of BETA at the end of July and didn’t spend any money on marketing and ad campaigns. So all these volumes came by word of mouth.
We see huge increase in OTC trades, and although overall market volume is decreasing, OTC segment is increasing.
That’s why we are developing our OTC offer and we are very bullish in our outlook for OTC market. We have a Private offer list for OTC trades, which is not visible to the general public. And we see a huge increase in that.
Bitcoinist: Decentralized exchanges (DEXs) and P2P platforms for trading bitcoin have tradeoffs when compared to centralized exchanges. What gaps do decentralized exchanges still need to fill to attract as many users as centralized exchanges do?
Hodl Hodl: Usability is the key. P2P exchanges in general and DEXs in particular struggle with complexity. Unfortunately, that’s just the way it is. There will never be a P2P exchange where you can just hit the button “Buy” and instantly get your bitcoins. However marginal UX improvements are still possible and necessary.
Bitcoinist: Are you concerned of a possible regulatory clampdown on DEXs? If an exchange can be closed down – can it be called ‘decentralized’?
Hodl Hodl: First of all, we are not a decentralized exchange and never called ourselves that. We are peer-to-peer. But yes, you’re right, if an exchange can be closed, it’s not truly decentralized.
We’re obviously concerned about regulations and we’ll be closing our service for US customers shortly, even though all US trades are already performed only by licensed brokers on our exchange.
The regulatory burden isn’t worth it, we don’t want to touch the US market and don’t want anything to do with it. They will not be the leaders in Bitcoin and crypto anyway.
Bitcoinist: What is your opinion on the current stablecoin craze? Hype or useful technology against volatility for platforms?
Hodl Hodl: We think it’s bullshit. Plain and simple.
Bitcoinist: Finally, will we see a Hodl Hodl app? Will there be another Honey Badger conference soon? Anything else you’d like to share?
Hodl Hodl: App? Don’t think so, at least not next year. Baltic Honeybadger conference will be back in September 2019 for sure.
Have you tried using decentralized exchanges like Hodl Hodl? Are they the future? Let us know below!
Images courtesy of Shutterstock, cryptograffiti.com, hodlhodl.com