Analysis of the YouHodler user interface and their default risk assessment

Since about 4 months I’ve been using this site to keep my Crypto assets and I really like the User experience (UX) and also the design, both of the website and their Android / Iphone application. YouHodler is a DeFi platform where you can store your Crypto assets and get a yearly percentage interest, just as other known websites BlockFi and Nexus. With the particularity, that YouHodler let’s you bet on UP / Down price changes and increase your assets (To be clear: That if your technical analysis is good and it goes in the direction you estimate)
It flows, uses very modern web techniques, that are not perfect since many times you need to refresh the whole thing until it works but it’s visually appealing and also simple to use. But there is something that called my attention and I wanted to write about it here, with some thoughts, because I’m sure that I’m not the only one that detected this.
This is not a critic to the site, but more my personal view, about how the UX and interaction design can influence risk and sometimes put the user in an undesired position just because he wanted to take a fast action to increase his assets.

Here is an enumeration of the defaults I’m talking about:

1. MultiHodl price bets take always your full amount of the Crypto choosed

Let’s say I have 48.5 UNI and I choose to make an UP bet this is what happens as default

MultiHodl UP bet as default full amount of the coin you choose, and a 11X risk (Price Down level 7%)

Only on Ipad / Iphone when you click over the amount to bet it offers a quick 20% or 50% selection.
That’s fine and much better than Android or the Web version that come with the full amount and you have to update it by hand. Are you in a rush since you loose momentum and click fast, well it’s your risk, you ‘ve just put all your Crypto at stake:

Now what happens if the default Price Down Limit (PDL) is hit?
As default is 11x or 13x that gives you about 7 or 8% PDL: If it suddenly goes down that amount you have 0 left. Is all gone. That’s what is a margin call about. When the down margin call is hit, in case of an UP bet, the amount you use as collateral is used to repay the Loan.

This is a real operation happening, and YouHodler is buying or selling assets, in a chain of loans so this is what is all about.

2. Longer term loans called Turbocharged

With another option called Turbocharged loans happens something similar, let’s say I choose to Turbocharge my 0.010045 Bitcoin:

Very similar situation. As default full amount is selected. As default the highest risk level is selected.
A -5% price down limit can “maybe” work after a very low moment, like in March 2020, or even in whole period till November 2020 since it was mostly in a bullish scheme going up all the time. But it’s not the normal situation, and everything that growths has pullbacks. This pullbacks are usually much higher than 5% and it maybe go 15 or even 20% down in a single day. That happens with everything if you see the stock marketing, but specially with Crypto. Now let’s check what happened in Black Friday as a first example:

Black Friday has seen some years a pullback for Cryptocurrency, no idea why. That is a 12 % pullback in 24 hrs.

Now that is a 12% pullback in less than 24 hrs. So imagine that even if we start a Turbocharged loan on the green arrow, we will be very happy since it goes up in the next hours, only to wake up the next day with the Price Down Limit call (PDL).
And what happens with a Turbocharged loan when the PDL is hit?
Basically you get part of the money back in EUR (If you choose EUR as borrowed ticker) but the rest of your crypto is gone forever. So be aware that when choosing a -5% PDL you are taking an unusually high risk that can backfire in any moment, even if at the beginning is going up. To make a more visual example with my own bad technical analysis and failure, this was done with 2.5 ETH in January 22 aprox. in a moment where all Crypto was going down at least 10%:

5% PDL was hit, got back 956 EUR, and my 2.5 ETH is gone. So I loosed aprox. 1.5 ETH

Please notice that this is my fault since I forgot to change the plan to a 2 Month -25% PDL. But is also partly the unusual YouHodler settings, that take the full amounts and the more risky options as their default choice.
Now the question is: Is this deliberately made? Or is just because the UX was designed like this?

Ultimately it is the user choice to select how much risk he is going to take. That is clear and I’m not complaining about it. In many cases I won, other I loosed, is all risk investment money that I can afford to loose and I won’t cry about it, not even a minute. But in this case, I think having such a great UX designer on board they could have done much better.
If you are DeFi company that is willing to make your users HODL their assets, then you don’t select the full amounts with the higher risiko as default. At least make this an user choice (More on that later)

3. Not transparent reporting options for MultiHodl bets

If you use MultiHODL for doing bets regularly, there is not any option to download a full report of your wins/looses. You have to make it yourself, this is for example my own online Excel for this:

214 € won on January alone.

As you can see, if you do a good technical analysis, and you are strong enough to hold and get out only in a win position there is some money to be made. And I could recover my 1.5 ETH in 2 months if I wanted to.
But that’s not the point. My idea to make this platform better is to add in the settings a Risk profile option:

◎ High risk, as default -5% PDL, x11 MultiHodl risk. Full crypto amount
◎ Low risk profile, as default -25% PDL, x6 MultiHodl risk. Uses 20% of your selected crypto

But as you see is not preselected the High risk option how YouHodler is doing it now is like this:

🔘 High risk
◎ Low risk

What I really expect as a user is that there is a setting or similar to select the default risk I’m going to take. Maybe not preselected, just let the user decide.
There is a reason there are laws in place at least in the EU, so you cannot preselect the join newsletter when a user registers:

☑ Join our newsletter

You won’t see something alike in a website. At least not in an European website since the protection laws clearly forbid this and there is high fine to pay if you do it.
I know that the decentralized finance is a different situation and I’m not saying that what YouHodler is doing is inherently bad or wrong. It’s just my opinion that it should be a better option to do it.
Or at least like I mentioned before, to let the user select his risk profile in settings so the defaults are treated differently for each personal setting.

This will be a very smart choice to make the users more secure about using the platform and also a way to make the YouHodlr users hold more assets instead of loosing them in wild rides with the highest risk in a volatile market where you should be better a good technical analyst instead of a wild cowboy.
I hold only a part of my assets in YouHodler and others are in my private wallet. Part of them are also in my girlfriend BlockFi account, I think is a good idea, not to put all eggs in one basket since in this game is all about risk.

That said I’m fond of using YouHodler even with the issues I mentioned. I think it has a lot of potential and is very well designed in many aspects, their UI is consistent and the user experience well designed, something that being a backend website developer I can confirm.
Any reaction or explanation for my claims here will be also published, and of course ideas or comments, are always welcome.

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