diff --git a/pkg/atproto/resolver.go b/pkg/atproto/resolver.go
index c36a4fa..03447e9 100644
--- a/pkg/atproto/resolver.go
+++ b/pkg/atproto/resolver.go
@@ -2,15 +2,50 @@ package atproto
 
 import (
 	"context"
+	"errors"
 	"fmt"
 	"io"
+	"net"
 	"net/http"
 	"strings"
 	"time"
 
+	"github.com/bluesky-social/indigo/atproto/identity"
 	"github.com/bluesky-social/indigo/atproto/syntax"
 )
 
+// ErrHoldDIDPermanent marks a hold-DID resolution failure that no retry can
+// fix: a malformed identifier, or a DID whose document does not exist. It is a
+// fact about stored data — typically a stale or hand-edited sailor profile
+// defaultHold — rather than a fault on our side, so callers can log it quietly
+// instead of at ERROR and avoid burying real faults. Transient failures (a PLC
+// blip, a network error) deliberately do not carry it.
+var ErrHoldDIDPermanent = errors.New("hold DID is not resolvable")
+
+// didWebHostUnusable reports whether a did:web identifier names something the
+// identity directory can never resolve. The directory requires a plain
+// hostname and rejects ports (percent-encoded as %3A), bare IPs, and
+// localhost. Detecting those here, rather than string-matching the directory's
+// error prose, is what lets ResolveHoldDIDToURL classify the failure as
+// permanent. Conservative by design: anything not clearly hopeless is left to
+// the transient path, so an unfamiliar failure still surfaces loudly.
+func didWebHostUnusable(did string) bool {
+	host, ok := strings.CutPrefix(did, "did:web:")
+	if !ok {
+		return false
+	}
+	if i := strings.IndexByte(host, ':'); i != -1 { // path-qualified did:web
+		host = host[:i]
+	}
+	if strings.Contains(host, "%3A") || strings.Contains(host, "%3a") {
+		return true // a port survived encoding, e.g. localhost%3A8080
+	}
+	if host == "" || host == "localhost" || strings.HasSuffix(host, ".localhost") {
+		return true
+	}
+	return net.ParseIP(host) != nil
+}
+
 // holdDIDResolveClient bounds the /.well-known/atproto-did fetch so an
 // unreachable or slow hold can't stall /auth/token (this resolution runs on the
 // hot gate + fetch path) past Docker's token-fetch timeout. It's a plain
@@ -98,7 +133,7 @@ func ResolveHoldDIDToURL(ctx context.Context, did string) (string, error) {
 	directory := GetDirectory()
 	didParsed, err := syntax.ParseDID(did)
 	if err != nil {
-		return "", fmt.Errorf("invalid hold DID %q: %w", did, err)
+		return "", fmt.Errorf("invalid hold DID %q: %w: %w", did, ErrHoldDIDPermanent, err)
 	}
 
 	ident, err := directory.LookupDID(ctx, didParsed)
@@ -109,6 +144,12 @@ func ResolveHoldDIDToURL(ctx context.Context, did string) (string, error) {
 		if testMode && strings.HasPrefix(did, "did:web:") {
 			return DIDWebToURL(did), nil
 		}
+		// A missing DID document or a structurally unusable did:web will fail
+		// identically on every retry, so mark it permanent and let callers pick
+		// a quieter log level.
+		if errors.Is(err, identity.ErrDIDNotFound) || didWebHostUnusable(did) {
+			return "", fmt.Errorf("failed to resolve hold DID %s: %w: %w", did, ErrHoldDIDPermanent, err)
+		}
 		return "", fmt.Errorf("failed to resolve hold DID %s: %w", did, err)
 	}
 
diff --git a/pkg/atproto/resolver_test.go b/pkg/atproto/resolver_test.go
index a5e59e8..7d4f881 100644
--- a/pkg/atproto/resolver_test.go
+++ b/pkg/atproto/resolver_test.go
@@ -665,3 +665,31 @@ func TestResolveHandleToDIDContextCancellation(t *testing.T) {
 		t.Log("Expected error due to context cancellation, but got success (identifier may have been parsed without network)")
 	}
 }
+
+// TestDIDWebHostUnusable pins the classification that decides whether a hold
+// resolution failure is logged at DEBUG or ERROR. Getting this wrong in the
+// permissive direction is the safe failure (a real fault stays loud); getting
+// it wrong the other way buries genuine errors, which is what BUGS finding 21
+// was about.
+func TestDIDWebHostUnusable(t *testing.T) {
+	tests := []struct {
+		name string
+		did  string
+		want bool
+	}{
+		{"port survives percent-encoding", "did:web:localhost%3A8080", true},
+		{"lowercase percent-encoding", "did:web:localhost%3a8080", true},
+		{"bare localhost", "did:web:localhost", true},
+		{"IPv4 literal", "did:web:172.28.0.3", true},
+		{"real hold hostname", "did:web:us-chi1.cove.seamark.dev", false},
+		{"path-qualified did:web", "did:web:example.com:user:alice", false},
+		{"did:plc is not did:web", "did:plc:wnbpdx4bn5uts5yd2o2g3gnm", false},
+	}
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			if got := didWebHostUnusable(tt.did); got != tt.want {
+				t.Errorf("didWebHostUnusable(%q) = %v, want %v", tt.did, got, tt.want)
+			}
+		})
+	}
+}
diff --git a/pkg/auth/hold_remote.go b/pkg/auth/hold_remote.go
index 187c650..c9c318d 100644
--- a/pkg/auth/hold_remote.go
+++ b/pkg/auth/hold_remote.go
@@ -131,10 +131,23 @@ func (a *RemoteHoldAuthorizer) GetCaptainRecord(ctx context.Context, holdDID str
 				"error", err)
 			return staleCached.CaptainRecord, nil
 		}
-		slog.Error("Captain record fetch failed",
-			"holdDID", holdDID,
-			"denial_reason", "captain_record_fetch_failed",
-			"error", err)
+		// A hold DID that can never resolve is a property of stored user data
+		// (a stale or hand-edited sailor profile defaultHold), not a fault on
+		// our side, and nothing is cached on this path — so it re-logs on every
+		// single request for that user. Two such accounts once produced 99.9%
+		// of this service's ERROR lines. Keep ERROR for failures an operator
+		// could actually act on.
+		if errors.Is(err, atproto.ErrHoldDIDPermanent) {
+			slog.Debug("Captain record fetch skipped, hold DID cannot be resolved",
+				"holdDID", holdDID,
+				"denial_reason", "captain_record_fetch_failed",
+				"error", err)
+		} else {
+			slog.Error("Captain record fetch failed",
+				"holdDID", holdDID,
+				"denial_reason", "captain_record_fetch_failed",
+				"error", err)
+		}
 		return nil, fmt.Errorf("failed to get captain record for %s: %w", holdDID, err)
 	}